$100,000,000
CREDIT AGREEMENT
among
ENVIROSOURCE, INC.,
INTERNATIONAL MILL
SERVICE, INC.,
The Several Lenders
from Time to Time Parties Hereto,
NATIONSBANK, N.A.,
as Administrative Agent
and
CREDIT LYONNAIS
NEW YORK BRANCH,
as Syndication Agent
Dated as of December 19, 1995
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . 24
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS . . . . . . . . . . . . . 24
2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . 24
2.2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.3 Procedure for Borrowing . . . . . . . . . . . . . . . . . 26
2.4 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.5 Optional Termination or Reduction of Commitments. . . . . 27
2.6 Mandatory Prepayments and Commitment Reductions . . . . . 28
2.7 Optional Prepayments. . . . . . . . . . . . . . . . . . . 28
2.8 Conversion and Continuation Options . . . . . . . . . . . 29
2.9 Minimum Amounts of Eurodollar Loans . . . . . . . . . . . 30
2.10 Interest Rates and Payment Dates. . . . . . . . . . . . . 30
2.11 Computation of Interest and Fees. . . . . . . . . . . . . 30
2.12 Inability to Determine Interest Rate. . . . . . . . . . . 31
2.13 Pro Rata Treatment and Payments . . . . . . . . . . . . . 31
2.14 Illegality. . . . . . . . . . . . . . . . . . . . . . . . 33
2.15 Requirements of Law . . . . . . . . . . . . . . . . . . . 33
2.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.17 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . 37
3.1 L/C Commitment. . . . . . . . . . . . . . . . . . . . . . 37
3.2 Procedure for Issuance of Letters of Credit . . . . . . . 39
3.3 Fees, Commissions and Other Charges . . . . . . . . . . . 39
3.4 L/C Participation . . . . . . . . . . . . . . . . . . . . 40
3.5 Reimbursement Obligation of the Borrower and the
Parent. . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.6 Obligations Absolute. . . . . . . . . . . . . . . . . . . 41
3.7 Letter of Credit Payments . . . . . . . . . . . . . . . . 42
3.8 Application . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 42
4.1 Financial Condition . . . . . . . . . . . . . . . . . . . 42
4.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . 43
4.3 Corporate Existence; Compliance with Law. . . . . . . . . 44
4.4 Corporate Power; Authorization; Enforceable
Obligations. . . . . . . . . . . . . . . . . . . . . . . 44
4.5 No Legal Bar. . . . . . . . . . . . . . . . . . . . . . . 44
4.6 No Material Litigation. . . . . . . . . . . . . . . . . . 45
4.7 No Default. . . . . . . . . . . . . . . . . . . . . . . . 45
4.8 Ownership of Property; Liens. . . . . . . . . . . . . . . 45
4.9 Intellectual Property . . . . . . . . . . . . . . . . . . 45
4.10 No Burdensome Restrictions. . . . . . . . . . . . . . . . 45
4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.12 Federal Regulations . . . . . . . . . . . . . . . . . . . 46
4.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.14 Investment Company Act; Other Regulations . . . . . . . . 47
4.15 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 47
4.16 Purpose of the Revolver . . . . . . . . . . . . . . . . . 47
4.17 Environmental Matters . . . . . . . . . . . . . . . . . . 48
4.18 Collateral. . . . . . . . . . . . . . . . . . . . . . . . 49
4.19 Agreements. . . . . . . . . . . . . . . . . . . . . . . . 50
4.20 No Material Misstatements . . . . . . . . . . . . . . . . 50
4.21 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . 51
4.22 Transactions with Affiliates and Shareholders . . . . . . 51
4.23 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 51
4.24 Labor Relations . . . . . . . . . . . . . . . . . . . . . 52
SECTION 5. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . 52
5.1 Conditions to Initial Extension of Credit . . . . . . . . 52
5.2 Conditions to Each Extension of Credit. . . . . . . . . . 56
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . 57
6.1 Financial Statements. . . . . . . . . . . . . . . . . . . 58
6.2 Certificates; Other Information . . . . . . . . . . . . . 59
6.3 Payment of Obligations. . . . . . . . . . . . . . . . . . 60
6.4 Conduct of Business and Maintenance of Existence. . . . . 60
6.5 Maintenance of Property; Insurance. . . . . . . . . . . . 60
6.6 Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . . . . . . . 61
6.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.8 Environmental Matters . . . . . . . . . . . . . . . . . . 62
6.9 Acquired Subsidiaries; Further Security and
Guarantees. . . . . . . . . . . . . . . . . . . . . . . . 63
6.10 Independent Corporate Existence . . . . . . . . . . . . . 64
SECTION 7. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 65
7.1 Financial Condition Covenants . . . . . . . . . . . . . . 65
7.2 Limitation on Indebtedness. . . . . . . . . . . . . . . . 67
7.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . 69
7.4 Limitation on Guarantee Obligations . . . . . . . . . . . 70
7.5 Limitation on Fundamental Changes . . . . . . . . . . . . 71
7.6 Limitation on Sale of Assets. . . . . . . . . . . . . . . 72
7.7 Limitation on Dividends . . . . . . . . . . . . . . . . . 73
7.8 Limitation on Capital Expenditures. . . . . . . . . . . . 74
7.9 Limitation on Investments, Loans and Advances . . . . . . 74
7.10 Limitation on Payments and Modification of Debt
Instruments and Preferred Stock . . . . . . . . . . . . . 75
7.11 Limitation on Transactions with Affiliates. . . . . . . . 76
7.12 Limitation on Sales and Leasebacks. . . . . . . . . . . . 76
7.13 Limitation on Changes in Fiscal Year. . . . . . . . . . . 76
7.14 Compliance with ERISA . . . . . . . . . . . . . . . . . . 76
7.15 Noncash Proceeds. . . . . . . . . . . . . . . . . . . . . 77
7.16 Activities of IMS Funding . . . . . . . . . . . . . . . . 77
7.17 Activities of the Parent. . . . . . . . . . . . . . . . . 77
7.18 Restrictions Affecting Subsidiaries . . . . . . . . . . . 77
7.19 Environmental Condition of Property . . . . . . . . . . . 78
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 78
SECTION 9. GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . 82
9.1 Guarantee of Obligations. . . . . . . . . . . . . . . . . 82
9.2 No Subrogation. . . . . . . . . . . . . . . . . . . . . . 82
9.3 Amendments, etc. with respect to the Obligations;
Waiver of Rights. . . . . . . . . . . . . . . . . . . . . 83
9.4 Guarantee Absolute and Unconditional. . . . . . . . . . . 83
9.5 Reinstatement . . . . . . . . . . . . . . . . . . . . . . 84
9.6 Payments. . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 10. THE AGENTS. . . . . . . . . . . . . . . . . . . . . . . . 84
10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . 84
10.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . 84
10.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . 85
10.4 Reliance by Agents. . . . . . . . . . . . . . . . . . . . 85
10.5 Notice of Default . . . . . . . . . . . . . . . . . . . . 85
10.6 Non-Reliance on Agents, Other Lenders and the
Swingline Lender. . . . . . . . . . . . . . . . . . . . . 86
10.7 Indemnification . . . . . . . . . . . . . . . . . . . . . 86
10.8 Agents in Their Individual Capacities . . . . . . . . . . 87
10.9 Successor Agents. . . . . . . . . . . . . . . . . . . . . 87
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 87
11.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . 87
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . 89
11.4 Survival of Representations and Warranties. . . . . . . . 90
11.5 Payment of Expenses and Taxes; Indemnity. . . . . . . . . 90
11.6 Successors and Assigns; Participation and
Assignments . . . . . . . . . . . . . . . . . . . . . . . 91
11.7 Adjustments; Set-off. . . . . . . . . . . . . . . . . . . 93
11.8 Counterparts; Effectiveness . . . . . . . . . . . . . . . 94
11.9 Severability. . . . . . . . . . . . . . . . . . . . . . . 94
11.10 Integration . . . . . . . . . . . . . . . . . . . . . . . 94
11.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 95
11.12 Submission To Jurisdiction; Waivers . . . . . . . . . . . 95
11.13 Acknowledgements. . . . . . . . . . . . . . . . . . . . . 95
11.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . 96
11.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . 96
SCHEDULES:
Schedule 1.1(a) - Existing Letters of Credit
Schedule 1.1(b) - Revolving Credit Commitments
Schedule 4.15 - Subsidiaries
Schedule 4.19 - Material Contracts
Schedule 4.22 - Transactions with Affiliates
Schedule 7.2(b) - Intercompany Indebtedness of
Restricted Companies
Schedule 7.2(c) - Intercompany Indebtedness of
Unrestricted Companies
Schedule 7.2(e) - Existing Indebtedness and
Disqualified Capital Stock
Schedule 7.3(g) - Existing Liens
Schedule 7.4(e) - Existing Guarantee Obligations
Schedule 7.5(c) - Persons that may be Liquidated,
Wound Up or Dissolved
Schedule 7.18 - Restrictions Affecting Subsidiaries
Schedule 11.2 - Notices
EXHIBITS:
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Swingline Note
Exhibit B-1 - Form of Borrower Guarantee
Exhibit B-2 - Form of Subsidiaries Guarantee
Exhibit B-3 - Form of IU Guarantee
Exhibit C-1 - Form of Borrower Pledge Agreement
Exhibit C-2 - Form of Parent Pledge Agreement
Exhibit C-3 - Form of Subsidiaries Pledge Agreement
Exhibit D-1 - Form of Borrower Security Agreement
Exhibit D-2 - Form of Parent Security Agreement
Exhibit D-3 - Form of Subsidiaries Security Agreement
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Intercompany Note
Exhibit H-1 - Form of Opinion of Special Counsel to the Loan Parties
Exhibit H-2 - Form of Opinion of General Counsel of the Borrower
Exhibit H-3 - Form of Opinion of General Counsel of the Parent
Exhibit I - Form of Compliance Certificate
Exhibit J - Form of Subordination Agreement
Exhibit K - Form of Perfection Certificate
CREDIT AGREEMENT, dated as of December _____, 1995, among
International Mill Service, Inc., a Pennsylvania corporation (the
"Borrower"), EnviroSource, Inc., a Delaware corporation (the
"Parent"), the several banks and other financial institutions
from time to time parties to this Agreement (the "Lenders"),
NationsBank, N.A., as administrative agent for the Lenders
hereunder (in such capacity, the "Administrative Agent"), and
Credit Lyonnais New York Branch, the New York branch of a banking
organization organized under the laws of the Republic of France,
as syndication agent for the Lenders hereunder (in such capacity,
the "Syndication Agent").
W I T N E S S E T H
WHEREAS, the Borrower, the Parent and certain of the Lenders
parties hereto are parties to the Credit Agreement, dated as of
June 24, 1993, as amended, supplemented or otherwise modified
prior to the date hereof (the "Existing Credit Agreement");
WHEREAS, the Borrower and the Parent desire to repay the
indebtedness outstanding under the Existing Credit Agreement on
the Closing Date (as hereinafter defined) and, on or prior to
July 15, 1996, to repurchase and/or redeem the Parent's Class G
Preferred Stock with the proceeds of the revolving credit loans
provided for herein (collectively, the "Refinancing");
WHEREAS, the Borrower and the Parent have requested that the
Lenders make revolving credit loans, make swingline loans and
issue and/or participate in letters of credit in the aggregate
principal amount of up to $100,000,000 to finance a portion of
the Refinancing, to pay related fees and expenses and to finance
the continuing operations of the Parent and its subsidiaries; and
WHEREAS, the Lenders are willing to make such loans and to
issue and/or participate in such letters of credit on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto hereby agree as
follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greater
of (a) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1% and (b) the Prime Rate in effect on such
day. For purposes hereof: "Prime Rate" shall mean the rate
of interest per annum publicly announced from time to time
by NationsBank as its prime rate in effect at its principal
office in Charlotte, North Carolina (the Prime Rate not
being intended to be the lowest rate of interest charged by
NationsBank in connection with extensions of credit to
debtors); and "Federal Funds Effective Rate" shall mean, for
any day, the weighted average of the rates on overnight
federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for the day of such transactions received
by the Administrative Agent from three federal funds brokers
of recognized standing selected by it. Any change in the
ABR due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Revolving Credit Loans or Swingline Loans
the rate of interest applicable to which is based upon the
ABR.
"ABR Margin": for any day, calculated on a per annum
basis, (a) 0.50%, if such day is prior to the Matrix Pricing
Date and (b) if such day is on or after the Matrix Pricing
Date:
(i) 0.25%, if such day falls within a Level I
Pricing Period;
(ii) 0.50%, if such day falls within a Level II
Pricing Period; and
(iii) 0.75%, if such day falls within a Level
III Pricing Period.
Any change in the ABR Margin required hereunder shall become
effective five days after the date the Parent delivers its
financial statements required by subsection 6.1(a) or
6.1(d), as the case may be, and the certificate required by
subsection 6.2(e); provided that if the Parent fails to
deliver such financial statements and certificate on or
before the date such statements and certificate are required
to be delivered pursuant to subsection 6.1(a) or 6.1(d), as
the case may be, and subsection 6.2(e), the ABR Margin for
the period from such required date until the date such
statements and certificate are actually delivered shall be
calculated as if a Level III Pricing Period were in effect,
and after the date such statements and certificate are
actually delivered the ABR Margin shall be determined as
otherwise provided for herein.
"Administrative Agent": as defined in the preamble
hereto.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes
of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election
of directors of such Person or (b) direct or cause the
direction of the management and policies of such Person,
whether by contract or otherwise.
"Agents": the Administrative Agent and the Syndication
Agent.
"Aggregate Outstanding Extensions of Credit": as to
any Lender at any time, an amount equal to the sum of
(a) the aggregate principal amount of all Revolving Credit
Loans made by such Lender then outstanding, (b) such
Lender's Commitment Percentage of the Swingline Obligations
then outstanding and (c) such Lender's Commitment Percentage
of the L/C Obligations then outstanding.
"Agreement": this Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable Margin": for an ABR Loan, the ABR Margin
and, for a Eurodollar Loan, the Eurodollar Margin.
"Application": an application, in such form as the
Issuing Lender may specify from time to time, requesting the
Issuing Lender to issue a Letter of Credit.
"Asbestos": as provided under any Environmental Laws,
and including, without limitation, asbestos fibers and
friable asbestos, as such terms are defined under the
Environmental Laws.
"Asset Disposition": the sale, lease, sale-leaseback,
exchange, transfer, assignment, condemnation, taking or
similar disposition (including dispositions in the nature of
property losses, to the extent covered by insurance) of any
business units, assets (including licenses, trademarks and
other intangibles) or other properties of the Parent or any
of its Subsidiaries, other than such dispositions set forth
in subsections 7.6(b), (c), (d), (e) (other than
dispositions set forth in subsection 7.12(b)), (f), (g),
(h), (i) and (j) and other than the granting of Liens
permitted by subsection 7.3.
"Assignee": as defined in subsection 11.6(c).
"Available Commitment": as to any Lender at any time,
an amount equal to the excess, if any, of (a) such Lender's
Revolving Credit Commitment over (b) such Lender's Aggregate
Outstanding Extensions of Credit.
"Available Swingline Commitment": as to the Swingline
Lender at any time, an amount equal to the excess, if any,
of (a) the Swingline Commitment over (b) the then
outstanding Swingline Loans.
"Borrower": as defined in the preamble hereto.
"Borrower Guarantee": the guarantee to be executed and
delivered by the Borrower, substantially in the form of
Exhibit B-1, as the same may be amended, supplemented or
otherwise modified from time to time.
"Borrower Pledge Agreement": the pledge agreement to
be executed and delivered by the Borrower, substantially in
the form of Exhibit C-1, as the same may be amended,
supplemented or otherwise modified from time to time.
"Borrower Security Agreement": the security agreement
to be executed and delivered by the Borrower, substantially
in the form of Exhibit D-1, as the same may be amended,
supplemented or otherwise modified from time to time.
"Borrower Security Documents": the collective
reference to the Borrower Pledge Agreement and the Borrower
Security Agreement.
"Borrowing Date": any Business Day specified in a
notice pursuant to subsection 2.3, 2.8 or 3.2 as a date on
which the Borrower or the Parent, as the case may be,
requests (a) the Lenders to make Revolving Credit Loans
hereunder and/or (b) the Issuing Lender to issue a Letter of
Credit hereunder and/or (c) the Swingline Lender to make
Swingline Loans hereunder.
"Business Day": a day other than a Saturday, Sunday or
other day on which commercial banks in New York City or
Charlotte, North Carolina are authorized or required by law
to close; provided, however, that, when used in connection
with a Eurodollar Loan, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in
dollar deposits in the applicable interbank market.
"Capital Expenditures": for any period all amounts
(whether paid in cash or accrued as a liability) which would
be included as additions to property, plant and equipment
(including, without limitation, assets financed under
Capital Leases) on a consolidated statement of cash flows of
the Parent and its Subsidiaries for such period prepared in
accordance with GAAP, except for insurance proceeds which
are Reinvestment Funds.
"Capital Lease": any lease of property, real or
personal, the obligations of the lessee in respect of which
are required in accordance with GAAP to be capitalized on a
balance sheet of the lessee.
"Capital Stock": any and all shares, partnership and
other interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in
(however designated) the equity of a Person.
"Cash Equivalents": (a) securities issued or directly
and fully guaranteed or insured by the United States
Government or any agency or instrumentality thereof having
maturities of not more than 12 months from the date of
acquisition, (b) time deposits, bankers' acceptances and
certificates of deposit having maturities of not more than
12 months from the date of acquisition of any Lender or any
domestic commercial bank having capital and surplus in
excess of $500,000,000, in either case which has, or the
holding company of which has, a commercial paper rating
meeting the requirements specified in clause (d) below, (c)
repurchase obligations with a term of not more than 180 days
for underlying securities of the types described in clauses
(a) and (b) entered into with any bank meeting the
qualifications specified in clause (b) above, (d) commercial
paper of any Lender or which is rated at least A-2 or the
equivalent thereof by Standard & Poor's Corporation or P-2
or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc.
and in either case maturing within 270 days after the date
of acquisition and (e) money market funds substantially all
assets of which are invested in instruments described in
subsections (a) through (d) hereof.
"Cash Taxes": for any period, all state, local,
provincial, federal, foreign and other income taxes,
including, without duplication, franchise taxes classified
as income tax expense, paid by the Parent or any of its
Subsidiaries during such period.
"Change of Control": any of the following events:
(a) the liquidation or dissolution of, or sale of all or
substantially all the assets of, the Parent; (b) the
acquisition by any "Person" or related group (within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act, or any successor provision to either of the
foregoing, including any "group" acting for the purpose of
acquiring, holding or disposing of securities within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), other
than Permitted Holders, in a single transaction or in a
related series of transactions, by way of merger,
consolidation or other business combination or purchase of
beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act, or any successor provision), of Capital
Stock representing more than the greater of (i) 20% of the
total voting power entitled to vote in the election of the
Board of Directors of the Parent or such other Person
surviving the transaction and (ii) the total voting power
(entitled to vote in the election of the Board of Directors
of the Parent or such other Person surviving the
transaction) of the Principals; or (c) during any period of
two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of the Parent
(together with any new directors whose election by such
Board of Directors or whose nomination for election by the
shareholders of the Parent was approved by a vote of 66-2/3%
of the directors of the Parent then still in office who were
either directors at the beginning of such period or whose
election or nomination for election was previously so
approved) cease for any reason to constitute a majority of
the Board of Directors of the Parent then in office.
"Class": as defined in subsection 1.2(e).
"Class G Letter of Credit": a standby letter of credit
issued for the account of the Borrower and for the benefit
of the holders of the Class G Preferred Stock to provide
support for the redemption and/or repurchase of all the
outstanding Class G Preferred Stock on or before July 15,
1996, which standby letter of credit shall, by its terms,
(a) be in a maximum undrawn amount on any date equal to the
lesser of (i) $34,100,000 and (ii) the aggregate liquidation
value of all the Class G Preferred Stock outstanding on such
date plus unpaid dividends thereon to and including July 15,
1996, (b) permit presentation of such letter of credit for
payment, and drawdowns thereunder, under arrangements
satisfactory to the Agents and (c) expire no later than 4:00
P.M., Charlotte, North Carolina time, on July 15, 1996.
"Class G Preferred Stock": the Parent's Class G $7.25
Cumulative Convertible Preferred Stock, par value $.25 per
share.
"Closing Date": the first date on which all the
conditions precedent set forth in subsections 5.1 and 5.2
shall be satisfied.
"Closure Trust Fund Payments": for any period, any
closure trust fund payments by the Parent and its
Subsidiaries during such period.
"Code": the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral": all assets of any nature whatsoever of
any Person, now owned or hereinafter acquired, upon which a
Lien is purported to be created by any Security Document to
secure the obligations and liabilities of any Loan Party
hereunder or under any other Loan Document.
"Commercial Letter of Credit": as defined in
subsection 3.1(b)(i)(B).
"Commitment Percentage": as to any Lender at any time,
the percentage which such Lender's Revolving Credit
Commitment then constitutes of the aggregate Revolving
Credit Commitments of all the Lenders.
"Commitment Period": the period from and including the
Closing Date to but not including the Termination Date or
such earlier date on which the Revolving Credit Commitments
shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or
not incorporated, which is under common control with the
Parent or the Borrower within the meaning of Section 4001 of
ERISA or is part of a group which includes the Parent or the
Borrower and which is treated as a single employer under
Section 414 of the Code.
"Consolidated Interest Expense": for any period,
interest expense of the Parent and its Subsidiaries for such
period, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Net Income": for any period, the
consolidated net income (or loss) of the Parent and its
Subsidiaries for such period (taken as a cumulative whole),
determined in accordance with GAAP; provided that there
shall be excluded (to the extent the same would otherwise be
included in determining such consolidated net income)
(a) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary or is merged into or
consolidated with the Parent or any Subsidiary, (b) any
aggregate net gain or any aggregate net loss during such
period arising from the sale, exchange or other disposition
of capital assets (such term to include, whether tangible or
intangible, all property, plant and equipment, all inventory
sold in conjunction with dispositions of property, plant and
equipment and all securities except Cash Equivalents),
(c) any extraordinary item determined in accordance with
GAAP, (d) the cumulative effect of any accounting change
required by GAAP, (e) any income from the write-up of any
asset, (f) in the case of a successor to the Parent by
consolidation or merger or as a transferee of its assets,
any earnings of the successor corporation prior to such
consolidation, merger or transfer of assets and (g) any net
income of any Person (other than SALTS) if such Person is
not a Subsidiary of the Parent, except that (i) the Parent's
equity in the net income of any such Person for such period
shall be included in such net income up to the aggregate
amount of cash actually distributed by such Person during
such period to the Parent or a Subsidiary of the Parent as a
dividend or other distribution and (ii) the Parent's equity
in a net loss of any such Person for such period shall be
included in determining such net income.
"Consolidated Net Worth": at a particular date, all
amounts that would be included under stockholders' equity,
including amounts attributable to Preferred Stock (other
than Disqualified Capital Stock), on a consolidated balance
sheet of the Parent and its Subsidiaries determined in
accordance with GAAP as at such date.
"Consolidated Rental Expense": for any period, the
aggregate minimum rental obligations of the Parent and its
Subsidiaries determined on a consolidated basis payable in
respect of such period under leases of real and/or personal
property (net of income from sub-leases thereof), whether or
not such obligations are reflected as liabilities or
commitments on a consolidated balance sheet of the Parent
and its Subsidiaries or in the notes thereto, excluding,
however, obligations under Capital Leases.
"Consolidated Total Borrower Debt": at a particular
date, the Class G Letter of Credit and the aggregate
principal amount of all Indebtedness (other than
Intercompany Indebtedness) which would be reported on a
consolidated balance sheet of the Borrower and its
Subsidiaries at such date prepared in accordance with GAAP.
"Consolidated Total Debt": at a particular date, the
Class G Letter of Credit and the aggregate principal amount
of all Indebtedness (other than Indebtedness permitted by
subsection 7.2(i)) which would be reported on a consolidated
balance sheet of the Parent and its Subsidiaries at such
date prepared in accordance with GAAP.
"Contractual Obligation": as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such
Person is a party or by which it or any of its property is
bound. For purposes of this Agreement, references to a
"Contractual Obligation" of the Parent shall include,
without limitation, the Indenture.
"Credit Lyonnais": Credit Lyonnais New York Branch.
"Current Real Property": all Real Property currently
owned, leased or occupied by the Parent or any of its
Subsidiaries or on which the Parent or any of its
Subsidiaries conducts its business.
"Default": any of the events specified in Section 8,
whether or not any requirement for the giving of notice, the
lapse of time, or both, or any other condition, has been
satisfied.
"Disqualified Capital Stock": with respect to any
Person, (a) any Capital Stock of such Person which by its
terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable),
upon the happening of any event or otherwise (i) matures or
is mandatorily redeemable or subject to any mandatory
repurchase requirement, pursuant to a sinking fund
obligation or otherwise, (ii) is convertible into or
exchangeable or exercisable for Indebtedness or Disqualified
Capital Stock or (iii) is redeemable or subject to any
mandatory repurchase requirement at the option of the holder
thereof, in whole or in part, in each case on or prior to
the first anniversary of the Termination Date and (b) if
such Person is the Parent or a Subsidiary of the Parent, any
Preferred Stock of the Parent or such Subsidiary issued to
or held by any Person other than the Parent or a Restricted
Company that is a Wholly Owned Subsidiary of the Parent.
"Dollars" and "$": dollars in lawful currency of the
United States of America.
"EBITDA": for any period, the sum (without
duplication) of (a) Consolidated Net Income for such period,
plus (b) Consolidated Interest Expense for such period, plus
(c) income tax expense (including any franchise taxes
classified therein) of the Parent and its Subsidiaries for
such period, plus (d) depreciation and amortization expense
for the Parent and its Subsidiaries for such period;
provided, however, for purposes of subsection 7.1(d) only,
that if since the beginning of such period, the Parent or
any of its Subsidiaries shall have acquired all or
substantially all of an operating unit of a business,
whether by an acquisition of Capital Stock or assets, by
merger or otherwise, then EBITDA for such period shall be
calculated after giving pro forma effect thereto (including
the issuance of any Indebtedness) as if such acquisition
occurred on the first day of such period. For purposes of
the foregoing proviso, whenever pro forma effect is to be
given to such an acquisition, the pro forma calculations
shall be determined in good faith by a Responsible Officer
of the Parent, subject to the review and approval of the
Administrative Agent.
"Environmental Condition": any condition relating to
the presence, Release, disposal, storage or treatment of
Hazardous Materials in, at, on, under or about (a) the Real
Property or (b) the environment beyond the Real Property,
which Hazardous Materials migrated or emanated or are
alleged to have migrated or emanated from the Real Property
except in compliance with applicable Environmental Law or
any Permit.
"Environmental Law": any environmental or health and
safety-related law, regulation, rule, requirement,
ordinance, by-law, order or determination of any
governmental or judicial authority at the federal, state,
provincial or local level, whether existing as of the date
hereof, previously enforced or subsequently enacted.
"Environmental Memorandum": as defined in subsection
4.17(a).
"Environmental Notice": any written complaint, order,
citation, letter, inquiry, notice or other communication
from any Person which could reasonably be expected to have a
Material Adverse Effect affecting or relating to:
(a) the Parent or any of its Subsidiaries;
(b) any Current Real Property or any part thereof
or any interest therein; or
(c) any activity or operations at any time
conducted by the Parent or any of its Subsidiaries or
any other Person on or in connection with any Current
Real Property or any part thereof or any interest
therein,
with regard to the occurrence or presence of or exposure to
or possible or threatened or alleged occurrence or presence
of or exposure to a Release of Hazardous Materials or any
other environmental matter which is the subject of any
Environmental Law, including, without limitation,
(1) existence of any contamination or possible or
threatened contamination;
(2) remediation of any Release of Hazardous
Materials at, on, under or around the Real Property or
any part thereof; and
(3) any violation or alleged violation of any
Environmental Law.
"ERISA": the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as
applied to a Eurodollar Loan, the aggregate (without
duplication) of the rates (expressed as a decimal) of
reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of
Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect
thereto) dealing with reserve requirements, prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) by a member bank
of such System.
"Eurodollar Base Rate": with respect to each day
during each Interest Period pertaining to a Eurodollar Loan,
the rate per annum equal to the rate at which NationsBank is
offered Dollar deposits at or about 10:00 A.M., Charlotte,
North Carolina time, two Business Days prior to the
beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans
are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised
therein and in an amount comparable to the amount of its
Eurodollar Loan to be outstanding during such Interest
Period.
"Eurodollar Loans": Revolving Credit Loans the rate of
interest applicable to which is based upon the Eurodollar
Rate.
"Eurodollar Margin": for any day, calculated on a per
annum basis, (a) 1.75%, if such day is prior to the Matrix
Pricing Date and (b) if such day is on or after the Matrix
Pricing Date:
(i) 1.50%, if such day falls within a Level I
Pricing Period;
(ii) 1.75%, if such day falls within a Level II
Pricing Period; and
(iii) 2.00%, if such day falls within a Level
III Pricing Period.
Any change in the Eurodollar Margin required hereunder shall
become effective five days after the date the Parent
delivers its financial statements required by subsection
6.1(a) or 6.1(d), as the case may be, and the certificate
required by subsection 6.2(e); provided that if the Parent
fails to deliver such financial statements and certificate
on or before the date such statements and certificate are
required to be delivered pursuant to subsection 6.1(a) or
6.1(d), as the case may be, and subsection 6.2(e), the
Eurodollar Margin for the period from such required date
until the date such statements and certificate are actually
delivered shall be calculated as if a Level III Pricing
Period were in effect, and after the date such statements
and certificate are actually delivered the Eurodollar Margin
shall be determined as otherwise provided for herein.
"Eurodollar Rate": with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, a rate
per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in
Section 8, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition,
has been satisfied.
"Exchange Act": the Securities Exchange Act of 1934,
as amended.
"Excluded Taxes": as defined in subsection 2.16.
"Existing Credit Agreement": as defined in the
recitals to this Agreement.
"Existing Letters of Credit": the collective reference
to the outstanding letters of credit issued for the account
of the Parent or the Borrower, as the case may be, pursuant
to the terms of the Existing Credit Agreement, as more
specifically described on Schedule 1.1(a) hereto.
"Existing Security Documents": the Security Documents
(as defined in the Existing Credit Agreement).
"Extension of Credit": the making of any Revolving
Credit Loan or Swingline Loan or the issuance of any Letter
of Credit.
"Federal Funds Effective Rate": as defined in the
definition of ABR.
"Fee Letter": as defined in subsection 5.1(k).
"Filed SEC Documents": as defined in subsection
4.20(b).
"FINOVA": FINOVA Capital Corporation (formerly known
as Greyhound Financial Corporation), a Delaware corporation.
"FINOVA Financing": the slab hauler financing
transaction whereby FINOVA has provided $9,500,000 to IMS
Funding, as evidenced by that certain Loan and Security
Agreement, dated as of April 6, 1993, between FINOVA and IMS
Funding, as amended, supplemented, or otherwise modified
from time to time in accordance with the terms hereof and
thereof.
"Foreign Subsidiaries": the collective reference to
International Mill Service Limited and any other foreign
Subsidiary which shall be acquired subsequent to the date
hereof.
"FS&C": ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, a California general
partnership, or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Incorporated, a
Delaware corporation.
"GAAP": generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a
significant segment of the accounting profession, that are
(subject to subsection 1.2) applicable to the circumstances
as of the date of determination.
"Governmental Authority": any nation or government,
any state or other political subdivision thereof and any
entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Guarantee Obligation": as to any Person (the
"guaranteeing person"), any obligation of (a) the
guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has
issued a reimbursement, counter indemnity or similar
obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other
obligations (the "primary obligation") of any other third
Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to
maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency
of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee
Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business.
The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (x) an amount
equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is
made and (y) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantees": the collective reference to the Borrower
Guarantee, the Parent Guarantee, the Subsidiaries Guarantee
and the IU Guarantee.
"Guarantor": any Person delivering a Guarantee
pursuant to this Agreement.
"Hazardous Materials": any pollutant, contaminant,
toxic substance, petroleum or petroleum product, Asbestos,
polychlorinated biphenyls, underground storage tanks and the
contents thereof including, without limitation, any
materials defined in or regulated pursuant to any
Environmental Law.
"III": Imsamet of Idaho, Inc., a Delaware corporation.
"IMSAMET": IMSAMET, Inc., a Delaware corporation.
"Imsamet Group": the collective reference to IMSAMET,
III, Imsamet of Utah, Inc., Imsamet of Arizona and SALTS.
"Imsamet of Arizona": Imsamet of Arizona, an Arizona
general partnership.
"IMS Funding": IMS Funding Corporation, a Delaware
corporation.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which
is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Capital
Leases, (d) all obligations of such Person in respect of
letters of credit and all drafts drawn thereunder and not
reimbursed, acceptances or similar obligations issued or
created for the account of such Person, (e) all obligations
and liabilities of such Person in connection with Interest
Rate Agreements and (f) all liabilities secured by any Lien
on any property owned by such Person under circumstances
where such Person has not assumed or otherwise become liable
for the payment thereof; provided that for all purposes
hereof the amount of such liabilities referred to in the
foregoing clause (f) shall be deemed to be the lesser of the
fair market value of such property or the amount of the
liabilities so secured. The Indebtedness of any Person
shall include, without duplication, the Indebtedness of any
partnership in which such Person is a general partner.
"Indemnified Parties": as defined in subsection
6.8(d).
"Indenture": the Indenture dated as of July 1, ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company of New
York, as trustee, which indenture governs the terms of the
Senior Notes, as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof and
thereof.
"Insolvency": with respect to any Multiemployer Plan,
the condition that such Plan is insolvent within the meaning
of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 4.9.
"Intercompany Indebtedness": Indebtedness of the
Parent to any Subsidiary and Indebtedness of any Subsidiary
to the Parent or any other Subsidiary.
"Intercompany Notes": the collective reference to
promissory notes evidencing Intercompany Indebtedness in the
form set forth in Exhibit G or in form satisfactory to the
Administrative Agent.
"Interest Payment Date": (a) as to any ABR Loan, the
last day of each March, June, September and December to
occur while such ABR Loan is outstanding and the Termination
Date, (b) as to any Eurodollar Loan having an Interest
Period of three months or less, the last day of such
Interest Period and (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is
three months, or a whole multiple thereof, after the first
day of such Interest Period and the last day of such
Interest Period.
"Interest Period": with respect to any Eurodollar
Loan:
(a) initially, the period commencing on the
borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two,
three, six or, subject to availability thereof, as
determined by the Administrative Agent, twelve months
thereafter, as selected by the Borrower in its notice
of borrowing or conversion, as the case may be, given
with respect thereto; and
(b) thereafter, each period commencing on the
last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two,
three, six or, subject to availability thereof, as
determined by the Administrative Agent, twelve months
thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(1) if any Interest Period would otherwise end on
a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry
such Interest Period into another calendar month in
which event such Interest Period shall end on the
immediately preceding Business Day;
(2) any Interest Period that would otherwise
extend beyond the Termination Date shall end on the
Termination Date;
(3) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the
calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month;
and
(4) the Borrower shall select Interest Periods so
as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such
Eurodollar Loan.
"Interest Rate Agreement": any interest rate
protection agreement, interest rate future, interest rate
option, interest rate swap, interest rate cap or other
related interest rate arrangement, to or under which the
Parent or any of its Subsidiaries is a party or a
beneficiary.
"Issuing Lender": NationsBank, in its capacity as
issuer of any Letter of Credit.
"IU Cash Inflows": consist of (i) cash refunds or
recoveries on behalf of businesses formerly owned by IU
International and/or any of its Subsidiaries and not
included in the continuing operations of the Parent,
(ii) cash collections on notes and mortgages receivable,
(iii) amounts representing repayment of, or reimbursement
for, any IU Cash Outflows and (iv) other items of like
nature, in each case, included in the Parent's consolidated
statements of cash flows under the caption "Ongoing net cash
flows related to IU acquisition".
"IU Cash Outflows": consist of cash payments to
satisfy and/or settle obligations and contingent liabilities
of IU International and/or any of its Subsidiaries that
predate or arise as a result of events before the Parent's
acquisition of IU International or that arise in connection
with sales of assets or businesses formerly owned by IU
International and/or any of its Subsidiaries and not
included in the continuing operations of the Parent, such as
insurance claims and deductibles, increased insurance
premiums, legal fees and settlements, pension benefits and
other employee benefits, assessments related to such pension
and other employee benefits and all other cash payments of
like nature included in the Parent's consolidated statements
of cash flows under the caption "Ongoing net cash flows
related to IU acquisition", whether or not such amounts are
in dispute or paid under a reservation of rights or similar
contingency.
"IU Guarantee": the guarantee to be executed and
delivered by IU International, substantially in the form of
Exhibit B-3, as the same may be amended, supplemented or
otherwise modified from time to time.
"IU International": IU International Corporation, a
Delaware corporation.
"Landfill Permit Expenditures": for any period, any
expenditures by the Parent and its Subsidiaries during such
period to obtain, amend, maintain, extend or otherwise
modify landfill permits.
"L/C Commitment": $20,000,000 plus, on any date, the
amount of the L/C Obligations attributable to the Class G
Letter of Credit on such date.
"L/C Commitment Period": the period from and including
the Closing Date to but not including the earlier of (a) the
date that is five Business Days prior to the Termination
Date and (b) the date on which the Revolving Credit
Commitments shall terminate as provided herein.
"L/C Fee Payment Date": the last Business Day of each
March, June, September and December.
"L/C Obligations": at any time, an amount equal to the
sum of (a) the aggregate then undrawn and unexpired amount
of the then outstanding Letters of Credit and (b) the
aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to subsection 3.5(a).
"L/C Participants": the collective reference to all
the Lenders, including the Issuing Lender.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in subsection 3.1(a).
"Level I Pricing Period": any period on or after the
Matrix Pricing Date during which the Pricing Ratio is less
than or equal to 3.5 to 1.0 and no Event of Default has
occurred and is continuing.
"Level II Pricing Period": any period on or after the
Matrix Pricing Date during which the Pricing Ratio is
greater than 3.5 to 1.0 but less than or equal to 4.0 to 1.0
and no Event of Default has occurred and is continuing.
"Level III Pricing Period": any period on or after the
Matrix Pricing Date which is not a Level I Pricing Period or
a Level II Pricing Period.
"Lien": any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or
other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or
other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the
foregoing).
"Loan": an ABR Loan or a Eurodollar Loan, as the case
may be.
"Loan Documents": this Agreement, the Revolving Credit
Notes, the Swingline Note, the Applications, the Guarantees,
the Security Documents and the Subordination Agreement.
"Loan Parties": the Borrower, the Parent and each
Subsidiary of the Parent which is a party to a Loan
Document.
"Material Adverse Effect": a material adverse effect
on (a) the business, operations, property, condition
(financial or otherwise) or prospects of the Parent and its
Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement, any of the Revolving
Credit Notes, the Swingline Note or any of the other Loan
Documents or the rights or remedies of the Administrative
Agent, the Syndication Agent, the Swingline Lender, the
Issuing Lender or the Lenders hereunder or thereunder.
"Material Contracts": as defined in subsection
4.19(a).
"Matrix Pricing Date": the date which is five days
after the delivery by the Parent to the Administrative Agent
of its financial statements required by subsection 6.1(a)
and the certificate required by subsection 6.2(e) with
respect to its fiscal year ending December 31, 1996.
"Multiemployer Plan": a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"NationsBank": NationsBank, N.A.
"Net After-Tax Cash Proceeds": with respect to any
Prepayment Event, the product of (a) the excess, if any, of
(i) the aggregate amount of cash received (including any
cash received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise,
but only as and when received, and including property
insurance proceeds and condemnation awards in the case of
any property losses unless such insurance proceeds are
Reinvestment Funds) by the Parent or any of its
Subsidiaries, in connection with such Prepayment Event, over
(ii) the sum of (A) in the case of an Asset Disposition, the
principal amount of any Indebtedness (other than the
Obligations) which is secured by any such asset (other than
Indebtedness assumed by the purchaser of such asset) or
which is required to be, and is, repaid in connection with
the sale or other disposition thereof, (B) the reasonable
out-of-pocket fees and expenses incurred by the Parent or
any of its Subsidiaries in connection with such Prepayment
Event, whether payable at such time or thereafter, (C) any
incremental state, local or federal taxes actually payable
or reserved by the Parent or any of its Subsidiaries as a
result of such Prepayment Event, as reduced by any such
taxes subsequently refunded to or reversed by the Parent or
any of its Subsidiaries and (D) in the case of an Asset
Disposition, any liabilities associated with the assets sold
pursuant to such Asset Disposition and retained by the
Parent or any Subsidiary after such Asset Disposition and
any reasonable amount reserved for indemnification
obligations relating to such Asset Disposition, in each case
as determined in accordance with GAAP, and (b) in the case
of a Subsidiary of the Parent, the percentage of the
Parent's direct or indirect ownership in the Subsidiary
receiving such proceeds, or, in the case of the Parent,
100%.
"Non-Excluded Taxes": as defined in subsection 2.16.
"Notice of Borrowing": written notice, substantially
in the form of Exhibit E, duly executed by a Responsible
Officer of the Borrower and the Parent and delivered to the
Administrative Agent in connection with a request for a
Revolving Credit Loan.
"Obligations": (a) the unpaid principal of and
interest on (including, without limitation, interest
accruing after the maturity of the Revolving Credit Loans
and the Swingline Loans and interest accruing on or after
the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like
proceeding, relating to the Parent or the Borrower, whether
or not a claim for post-filing or post-petition interest is
allowed in such proceeding) the Revolving Credit Notes, the
Swingline Note and all other obligations and liabilities of
the Loan Parties to the Administrative Agent, the
Syndication Agent, the Lenders or the Swingline Lender,
whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this
Agreement, the Revolving Credit Notes, the Swingline Note,
any Letters of Credit, any other Loan Document or any other
document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all reasonable fees
and disbursements of counsel to the Administrative Agent,
the Syndication Agent, the Lenders or the Swingline Lender
that are required to be paid by any of the Loan Parties
pursuant to the terms of this Agreement or any other Loan
Document) or otherwise and (b) all obligations of the
Borrower whether now or hereafter existing to any Lender or
the Swingline Lender under or in connection with any
Interest Rate Agreement entered into or existing in
accordance with this Agreement.
"Parent": as defined in the preamble hereto.
"Parent Guarantee": the guarantee obligations of the
Parent set forth in Section 9.
"Parent Pledge Agreement": the pledge agreement to be
executed and delivered by the Parent, substantially in the
form of Exhibit C-2, as the same may be amended,
supplemented or otherwise modified from time to time.
"Parent Security Agreement": the security agreement to
be executed and delivered by the Parent, substantially in
the form of Exhibit D-2, as the same may be amended,
supplemented or otherwise modified from time to time.
"Parent Security Documents": the collective reference
to the Parent Security Agreement and the Parent Pledge
Agreement.
"Passive Investor": any Person or group of Persons
(other than the Principals) that at all times reports its
voting power and beneficial ownership of Capital Stock of
the Parent to the SEC on Schedule 13G.
"Participants": as defined in subsection 11.6(b).
"PBGC": the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Perfection Certificate": a certificate from the
Parent, substantially in the form of Exhibit K.
"Permit": any permit or other authorization issued
under any applicable Environmental Law.
"Permitted Holders": the collective reference to the
Principals and any Passive Investor.
"Person": an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plan": at a particular time, any employee benefit
plan which is covered by ERISA and in respect of which the
Parent, the Borrower or a Commonly Controlled Entity is (or,
if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledge Agreements": the collective reference to the
Borrower Pledge Agreement, the Parent Pledge Agreement and
the Subsidiaries Pledge Agreement.
"Preferred Stock": as applied to the Capital Stock of
any Person, Capital Stock of any class or classes (however
designated) which is preferred as to the payment of
dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such
Person, over Capital Stock of any other class of such
Person.
"Prepayment Event": shall mean (a) any Asset
Disposition, (b) any issuance or sale by the Parent or any
of its Subsidiaries of Capital Stock of the Parent or any of
its Subsidiaries (other than any such issuance or sale
(i) solely to the Parent or any of its Wholly Owned
Subsidiaries, (ii) pursuant to the exercise of warrants
outstanding on the date hereof or employee stock options or
similar rights issued to employees or (iii) permitted under
subsection 7.7(v)) or (c) any incurrence, creation or other
issuance of Indebtedness by the Parent or any of its
Subsidiaries (other than Indebtedness permitted under
subsection 7.2 as in effect on the date hereof); provided
that the foregoing definition shall not be deemed to imply
that any such action or event is permitted under this
Agreement.
"Pricing Ratio": on any day, the ratio of
(a) Consolidated Total Debt as of the last day of the
Reference Period with respect to such day to (b) EBITDA for
such Reference Period.
"Prime Rate": as defined in the definition of ABR.
"Principals": (a) FS&C and any of its Affiliates
(provided that FS&C has the power, directly or indirectly,
to direct or cause the direction of the management and
policies of such Affiliates) and (b) any member of the
executive management of the Parent prior to the occurrence
of the circumstance constituting a potential Change of
Control.
"RCRA": as defined in the definition of Real Property.
"Real Property": any real property or "facility" (as
defined in the Resource Conservation and Recovery Act, 42
U.S.C. & 6901 et seq. ("RCRA")) currently or formerly owned,
leased or occupied by the Parent or any of its Subsidiaries.
"Reduction Trigger Date": as defined in subsection
2.6(d).
"Reference Period": with respect to any day, the
period of four consecutive fiscal quarters of the Parent
immediately preceding, or ending on, such day.
"Refinancing": as defined in the recitals to this
Agreement.
"Register": as defined in subsection 11.6(d).
"Regulation G": Regulation G of the Board of Governors
of the Federal Reserve System as in effect from time to
time.
"Regulation U": Regulation U of the Board of Governors
of the Federal Reserve System as in effect from time to
time.
"Regulation X": Regulation X of the Board of Governors
of the Federal Reserve System as in effect from time to
time.
"Reimbursement Obligation": the obligation of the
Borrower or the Parent, as the case may be, to reimburse the
Issuing Lender pursuant to subsection 3.5(a) for amounts
drawn under Letters of Credit.
"Reinvestment Funds": with respect to any property
insurance proceeds from a property loss, that portion of
such proceeds as shall be reinvested, in a commercially
reasonable manner, in the repair, restoration or replacement
of the properties and assets that were the subject of such
loss; provided that if the aggregate amount of such proceeds
with respect to any such property loss or series of related
property losses exceeds $5,000,000, (a) the Borrower shall
deliver a certificate of a Responsible Officer of the
Borrower to the Administrative Agent within 90 days after
such property loss, which certificate shall describe such
loss and the action proposed to be taken with respect
thereto, (b) from and after the date of delivery of such
certificate, the Borrower shall diligently proceed, in a
commercially reasonable manner, to complete the repair,
restoration or replacement of the properties and assets that
were the subject of such property loss as described in such
certificate and (c) all such proceeds shall be expended as
described in such certificate no later than 365 days
following receipt of the proceeds with respect to such loss.
"Release": as defined in Section 101(22) of the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601, but excluding any Release permitted and
appropriate under any Permit.
"Reorganization": with respect to any Multiemployer
Plan, the condition that such plan is in reorganization
within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in
Section 4043 of ERISA, other than those events as to which
the 30-day notice period is waived under subsections .13,
.14, .16, .18, .19 or .20 of PBGC Reg. Section 2615.
"Required Lenders": at any time, Lenders the
Commitment Percentages of which aggregate more than 50% of
the aggregate Commitment Percentages of all Lenders.
"Required Permits": as defined in subsection 4.17(b).
"Requirement of Law": as to any Person, the
certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its
property is subject.
"Responsible Officer": (a) as to any Loan Party, the
chief executive officer, the president, any vice president
or, with respect to financial matters, the chief financial
officer, treasurer or controller of such Loan Party and (b)
in addition, as to any Loan Party, other than the Parent,
any other officer of such Loan Party who is also a
Responsible Officer of the Parent.
"Restricted Companies": the collective reference to
the Parent, the Borrower, IMSAMET, IU International and any
other Subsidiary which has executed a Guarantee, a Pledge
Agreement (if such Restricted Company holds (a) any Capital
Stock of the Parent or any Subsidiary, (b) any Intercompany
Notes or (c) any Account Debtor Notes (as defined in the
Pledge Agreements)) and a Security Agreement (or
documentation substantially similar to such documents if
such documentation is entered into after the Closing Date).
"Restricted Payments": as defined in subsection 7.7.
"Revolver": the revolving credit facilities
established pursuant to this Agreement.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender to (a) make Revolving Credit Loans
to the Borrower, (b) participate in Swingline Loans to the
Borrower and (c) participate in Letters of Credit issued for
the account of the Borrower or the Parent, as the case may
be, in an aggregate principal and/or face amount at any one
time outstanding not to exceed the amount set forth opposite
such Lender's name in Schedule 1.1(b) under the caption
"Revolving Credit Commitment".
"Revolving Credit Loans": revolving credit loans made
by the Lenders to the Borrower pursuant to subsection
2.1(a).
"Revolving Credit Note": as defined in subsection
2.2(a).
"SALTS": Solar Aluminum Technology Services, a Utah
partnership.
"SEC": the United States Securities and Exchange
Commission or any other Governmental Authority succeeding to
the responsibilities thereof.
"Secured Parties": (a) the Lenders, the Swingline
Lender and the Issuing Lender, (b) the Agents in their
capacities as such under each Loan Document, (c) the
beneficiaries of each indemnification obligation undertaken
by the Parent or any other Loan Party under any Loan
Document, (d) any Lender in its capacity as a counterparty
to an Interest Rate Agreement entered into or existing as
permitted under this Agreement and (e) the permitted
successors and assigns of the foregoing.
"Security Agreements": the collective reference to the
Borrower Security Agreement, the Parent Security Agreement
and the Subsidiaries Security Agreement.
"Security Documents": the collective reference to the
Pledge Agreements, the Security Agreements and all other
security documents hereafter delivered to the Administrative
Agent granting a Lien on any asset or assets of any Person
to secure the obligations and liabilities of any of the Loan
Parties hereunder, under the Revolving Credit Notes, the
Swingline Note, any Letter of Credit and/or under any of the
other Loan Documents or to secure any guarantee of any such
obligations and liabilities.
"Senior Notes": the 9-3/4% Senior Notes due 2003
issued by the Parent pursuant to the Indenture or any
refinancing thereof permitted hereunder.
"Single Employer Plan": any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Smaller Sale": a disposition (whether made pursuant
to a single sale or a series of related transactions) of
equipment or other tangible property which the Borrower
determines in good faith to be obsolete, surplus or no
longer useful having Net After-Tax Cash Proceeds of less
than $500,000.
"Solvent": as defined in subsection 4.21.
"Standby Letter of Credit": as defined in subsection
3.1(b)(i)(A).
"Subordination Agreement": the subordination agreement
to be executed and delivered by each of the Restricted
Companies and the Administrative Agent, substantially in the
form of Exhibit K, as the same may be amended, supplemented
or otherwise modified from time to time.
"Subsidiaries Guarantee": the guarantee to be executed
and delivered by each of the Parent's Subsidiaries (other
than the Borrower, IU International, IMS Funding, III,
Imsamet of Arizona and the Foreign Subsidiaries),
substantially in the form of Exhibit B-2, as the same may be
amended, supplemented or otherwise modified from time to
time.
"Subsidiaries Pledge Agreement": the pledge agreement
to be executed and delivered by each of the Parent's
Subsidiaries (other than the Borrower, IMS Funding, III,
Imsamet of Arizona and the Foreign Subsidiaries),
substantially in the form of Exhibit C-3, as the same may be
amended, supplemented or otherwise modified from time to
time.
"Subsidiaries Security Agreement": the security
agreement to be executed and delivered by each of the
Parent's Subsidiaries (other than the Borrower, IMS Funding,
III, Imsamet of Arizona and the Foreign Subsidiaries),
substantially in the form of Exhibit D-3, as the same may be
amended, supplemented or otherwise modified from time to
time.
"Subsidiary": as to any Person, a corporation,
partnership or other entity of which shares of stock or
other ownership interests having ordinary voting power
(other than stock or such other ownership interests having
such power only by reason of the happening of a contingency)
to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity
are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or
more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Parent and shall include, without
limitation, the Borrower.
"Swingline Commitment": the commitment of the
Swingline Lender to make Swingline Loans to the Borrower
pursuant to subsection 2.1(c).
"Swingline Lender": NationsBank, in its capacity as
lender for any Swingline Loan.
"Swingline Loans": swingline loans made by the
Swingline Lender to the Borrower pursuant to subsection
2.1(c).
"Swingline Note": as defined in subsection 2.2(b).
"Swingline Obligations": at any time the aggregate
principal amount of all Swingline Loans outstanding at such
time.
"Syndication Agent": as defined in the preamble
hereto.
"TDS": EnviroSource Treatment & Disposal Services,
Inc., a Delaware corporation.
"Termination Date": January 2, 2001.
"Transferee": as defined in subsection 11.6(f).
"Type": as defined in subsection 1.2(e).
"Uniform Customs": the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, as the same may be
amended from time to time.
"Unrestricted Companies": the collective reference to
the Subsidiaries of the Parent that are not Restricted
Companies.
"Wholly Owned Subsidiary": at any time, any subsidiary
of any Person all the Capital Stock of which is at such time
directly or indirectly owned by such Person.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have
the defined meanings when used in the Revolving Credit Notes, the
Swingline Note or any certificate or other document made or
delivered pursuant hereto.
(b) The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The
words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement,
and Section, subsection, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
(d) For purposes of this Agreement, the Revolving Credit
Notes, the Swingline Note and any certificate or other document
made or delivered pursuant hereto, all accounting terms not
otherwise defined herein shall have the meanings assigned to them
in conformity with GAAP. Financial statements and other
information required to be delivered by the Parent to the Lenders
pursuant to subsection 6.1 shall be prepared in accordance with
GAAP as in effect on the date of such financial statements;
amounts used for determining compliance with the financial
covenants set forth in subsection 7.1 and for determining the
appropriate Applicable Margin and in connection with subsection
7.8 shall be computed in accordance with GAAP as in effect on the
date hereof. In the event GAAP as in effect on or after the
Closing Date differs from GAAP as in effect on the date hereof in
a manner that causes the amounts for specified items shown in the
Parent's financial statements to differ from amounts for such
items used in determining compliance with such financial
covenants, in determining the Applicable Margin or in connection
with subsection 7.8, the Parent shall deliver a statement
reconciling such differences.
(e) Loans hereunder are distinguished by "Class" and by
"Type". The Class of a Loan or of a Revolving Credit Commitment
to make such a Loan refers to whether such Loan is a Revolving
Credit Loan or a Swingline Loan, each of which is a separate
Class. The "Type" of a Loan refers to whether such Loan is an
ABR Loan or a Eurodollar Loan. Loans may (but need not) be
identified by Class and Type (e.g., an "ABR Revolving Credit
Loan" is a Loan which is both a Revolving Credit Loan and an ABR
Loan).
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions
hereof, each Lender severally agrees to make Revolving Credit
Loans to the Borrower from time to time during the Commitment
Period in an aggregate principal amount at any one time
outstanding, when added to such Lender's Commitment Percentage of
the then outstanding Swingline Obligations and L/C Obligations,
not to exceed the amount of such Lender's Revolving Credit
Commitment, as the same may be reduced from time to time pursuant
to subsections 2.5 and 2.6. During the Commitment Period, the
Borrower may use the Revolving Credit Commitments by borrowing,
prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions
hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof,
as determined by the Borrower and notified to the Administrative
Agent in accordance with subsections 2.3 and 2.8, provided that
(A) no Revolving Credit Loan shall be made as a Eurodollar Loan
at any time when an Event of Default has occurred and is
continuing and the Administrative Agent has, or the Required
Lenders have, determined that such Eurodollar Loan is not
appropriate, (B) no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the
Termination Date and (C) the Borrower shall not be entitled to
request any borrowing which, if made, would result in an
aggregate of more than ten separate Eurodollar Loans of any
Lender being outstanding hereunder, at any one time. For
purposes of the foregoing, Loans having different Interest
Periods, regardless of whether they commence on the same date,
shall be considered separate Loans.
(c) Subject to the terms and conditions hereof, the
Swingline Lender agrees to make Swingline Loans to the Borrower,
from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the
lesser of (i) $5,000,000 and (ii) the excess, if any, of (A) the
aggregate amount of all Lenders' Revolving Credit Commitments, as
the same may be reduced from time to time pursuant to subsections
2.5 and 2.6, over (B) the sum of (I) the then outstanding
Revolving Credit Loans, (II) the then outstanding L/C Obligations
and (III) the then outstanding Swingline Loans. During the
Commitment Period, the Borrower may use the Swingline Commitment
by borrowing, prepaying the Swingline Loans in whole or in part,
and reborrowing, all in accordance with the terms and conditions
hereof.
(d) All Swingline Loans shall be ABR Loans.
2.2 Notes. (a) The Revolving Credit Loans made by each
Lender shall be evidenced by a promissory note of the Borrower,
substantially in the form of Exhibit A-1, with appropriate
insertions as to payee, date and principal amount (a "Revolving
Credit Note"), payable to the order of such Lender and in a
principal amount equal to the lesser of (i) the amount of the
Revolving Credit Commitment of such Lender and (ii) the aggregate
unpaid principal amount of all Revolving Credit Loans made by
such Lender. Each Lender is hereby authorized to record the
date, Type and amount of each Revolving Credit Loan made by such
Lender, each continuation thereof, each conversion of all or a
portion thereof to another Type, the date and amount of each
payment or prepayment of principal thereof and, in the case of
Eurodollar Loans, the length of each Interest Period with respect
thereto, on the schedule annexed to and constituting a part of
its Revolving Credit Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the
information so recorded. Each Revolving Credit Note shall (x) be
dated the Closing Date, (y) be stated to mature on the
Termination Date and (z) provide for the payment of interest in
accordance with subsection 2.10.
(b) The Swingline Loans made by the Swingline Lender shall
be evidenced by a promissory note of the Borrower, substantially
in the form of Exhibit A-2, with appropriate insertions as to
date and principal amount (the "Swingline Note"), payable to the
order of the Swingline Lender and in a principal amount equal to
the lesser of (i) $5,000,000 and (ii) the aggregate unpaid
principal amount of all Swingline Loans. The Swingline Lender is
hereby authorized to record the date and amount of each Swingline
Loan and the date and amount of each payment or prepayment of
principal thereof on the schedule annexed to and constituting a
part of the Swingline Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the
information so recorded. The Swingline Note shall (x) be dated
the Closing Date, (y) be stated to mature on the Termination Date
and (z) provide for the payment of interest in accordance with
subsection 2.10.
2.3 Procedure for Borrowing. (a) The Borrower may borrow
under the Revolving Credit Commitments (other than the Swingline
Commitment) during the Commitment Period on any Business Day,
provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be substantially in the
form of Exhibit E hereto and must be received by the
Administrative Agent prior to 10:00 A.M., Charlotte, North
Carolina time, (i) three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving
Credit Loans are to be initially Eurodollar Loans or (ii) on the
Borrowing Date, otherwise), specifying (A) the amount to be
borrowed, (B) the requested Borrowing Date, (C) whether the
borrowing is to be of Eurodollar Loans, ABR Loans or a
combination thereof and (D) if the borrowing is to be entirely or
partly of Eurodollar Loans, the respective amounts of each such
Type of Loan and the respective lengths of the initial Interest
Periods therefor. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (x) in the case of ABR
Loans, a whole multiple of $1,000,000 (or, if the then Available
Commitments are less than $1,000,000, such lesser amount) and
(y) in the case of Eurodollar Loans, a whole multiple of
$1,000,000. Upon receipt of any such notice from the Borrower,
the Administrative Agent shall promptly notify each Lender
thereof. Each Lender will make the amount of its pro rata share
of each borrowing available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent
specified in subsection 11.2 prior to 1:00 P.M., Charlotte, North
Carolina time, on the Borrowing Date requested by the Borrower in
funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the
books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.
(b) The Borrower may borrow under the Swingline Commitment
during the Commitment Period on any Business Day, provided that
the Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent
prior to 10:00 A.M., Charlotte, North Carolina time, on the
Borrowing Date), specifying (i) the amount to be borrowed and
(ii) the requested Borrowing Date. Each borrowing under the
Swingline Commitment shall be in an amount equal to $100,000 or a
whole multiple thereof (or, if the then Available Swingline
Commitment is less than $100,000, such lesser amount). Upon
receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify the Swingline Lender thereof. The
Swingline Lender will make the amount of such borrowing available
to the Administrative Agent for the account of the Borrower at
the office of the Administrative Agent specified in subsection
11.2 prior to 1:00 P.M., Charlotte, North Carolina time, on the
Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then
be made available to the Borrower by the Administrative Agent
crediting the account of the Borrower on the books of such office
with the amount made available to the Administrative Agent by the
Swingline Lender and in like funds as received by the
Administrative Agent. The Swingline Lender, at any time in its
sole and absolute discretion may, and at any time as there shall
be a Swingline Loan outstanding for more than seven Business Days
the Swingline Lender shall, on behalf of the Borrower (which
hereby irrevocably directs and authorizes the Swingline Lender to
act on its behalf), request each Lender (including the Swingline
Lender) to make a Revolving Credit Loan in an amount equal to
such Lender's Commitment Percentage of any such outstanding
Swingline Loan. Not later than 1:00 P.M., Charlotte, North
Carolina time, on the next Business Day, each Lender shall make
its Commitment Percentage of such outstanding Swingline Loan
available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in
subsection 11.2 in funds immediately available to the
Administrative Agent, and the Administrative Agent will promptly
make such funds available to the Swingline Lender. The proceeds
of such Revolving Credit Loans shall be immediately applied to
repay any such outstanding Swingline Loan. All such Revolving
Credit Loans shall be ABR Loans.
2.4 Fees. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee for the
period from and including the first day of the Commitment Period
to the Termination Date, computed at the rate of .375% per annum
on the average daily amount of the Available Commitment of such
Lender during the period for which payment is made, payable
quarterly in arrears on the last day of each March, June,
September and December and on the Termination Date or such
earlier date as the Revolving Credit Commitments shall terminate
as provided herein, commencing on March 31, 1996. The Borrower
agrees to pay to the Administrative Agent, for its own account,
on the Closing Date and each anniversary of the Closing Date
prior to the Termination Date, an annual administration fee in
the amount set forth in the Fee Letter.
2.5 Optional Termination or Reduction of Commitments. The
Borrower shall have the right, upon not less than one Business
Day's notice to the Administrative Agent, to terminate the
Revolving Credit Commitments or, from time to time, to reduce the
amount of the Revolving Credit Commitments; provided that no such
termination or reduction shall be permitted if, after giving
effect thereto and to any prepayments of the Revolving Credit
Loans made on the effective date thereof, the then outstanding
principal amount of the Revolving Credit Loans, when added to the
then outstanding Swingline Obligations and L/C Obligations, would
exceed the amount of the Revolving Credit Commitments then in
effect. Any such reduction shall be in an amount equal to
$1,000,000 or a whole multiple thereof and shall reduce
permanently the Revolving Credit Commitments then in effect.
2.6 Mandatory Prepayments and Commitment Reductions. (a)
The Borrower shall promptly give notice to the Administrative
Agent of the consummation of any Prepayment Event which will
result in a mandatory prepayment and/or cash collateralization
pursuant to subsection 2.6(d). Upon receipt by the Parent or any
of its Subsidiaries of any Net After-Tax Cash Proceeds with
respect to any Prepayment Event, then on the fifth Business Day
after receipt of such Net After-Tax Cash Proceeds from such
Prepayment Event, the Revolving Credit Commitments shall, subject
to subsections 2.6(c) and 2.6(d), be reduced by an amount equal
to 50% of such Net After-Tax Cash Proceeds.
(b) Subject to subsection 2.6(c), the Revolving Credit
Commitments shall be reduced by $12,500,000 on January 4, 1999
and by $12,500,000 on January 3, 2000.
(c) Notwithstanding anything to the contrary contained
herein, in no event shall the Borrower or the Parent be required
pursuant to the terms of subsection 2.6(a) or 2.6(b) to reduce
the aggregate Revolving Credit Commitments of all the Lenders
below $75,000,000.
(d) Each reduction of the Revolving Credit Commitments
pursuant to this subsection 2.6 shall reduce permanently the
Revolving Credit Commitments then in effect and shall be
accompanied by a prepayment of (i) all Swingline Loans
outstanding and (ii) the Revolving Credit Loans outstanding in an
amount equal to the excess, if any, of the sum of (A) the
Revolving Credit Loans and (B) the L/C Obligations then
outstanding, over the Revolving Credit Commitments of all the
Lenders, as so reduced. Each prepayment of Loans pursuant to
this subsection 2.6(d) shall be accompanied by payment in full of
all accrued interest thereon to and including the date of such
prepayment, together with any additional amounts owing pursuant
to subsection 2.17. To the extent that in connection with the
requirements hereof the Swingline Loans and the Revolving Credit
Loans have been reduced to zero, and the L/C Obligations then
outstanding exceed the Revolving Credit Commitments of all the
Lenders, as reduced pursuant to this subsection 2.6, the Borrower
and/or the Parent shall, simultaneously with such reduction,
deposit in a cash collateral account with the Administrative
Agent, having terms and conditions acceptable to the
Administrative Agent, an amount equal to the amount by which such
outstanding L/C Obligations exceed the Revolving Credit
Commitments of all the Lenders, as so reduced. Notwithstanding
anything to the contrary contained in this subsection, unless
sooner required in writing by the Administrative Agent, the
Revolving Credit Commitment reductions required pursuant to
subsection 2.6(a) shall be required to be made only on each date
(a "Reduction Trigger Date") that the aggregate of the reduction
amounts required by subsection 2.6(a) since the last Reduction
Trigger Date or the Closing Date, as the case may be, are equal
to or greater than $1,000,000 or a whole multiple thereof and
shall be required to be reduced only by the next lower whole
multiple of $1,000,000 of such aggregate amount; and provided,
further, any amounts in excess of such whole multiple shall be
considered in determining the next Reduction Trigger Date and the
amount of the required Revolving Credit Commitment reductions and
the mandatory prepayments and/or cash collateralization required
by this subsection 2.6(d) on such next Reduction Trigger Date.
2.7 Optional Prepayments. (a) Subject to the provisions of
subsection 2.17, the Borrower may at any time and from time to
time prepay the Revolving Credit Loans, in whole or in part,
without premium or penalty, upon, in the case of Eurodollar
Loans, irrevocable notice to the Administrative Agent not later
than 10:00 A.M., Charlotte, North Carolina time, on the third
Business Day prior to such prepayment, or, in the case of ABR
Loans, upon irrevocable notice to the Administrative Agent prior
to 10:00 A.M., Charlotte, North Carolina time, on the date of
such prepayment, in each case, specifying (i) the date and amount
of prepayment and (ii) whether the prepayment is of Eurodollar
Loans, ABR Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each. Upon receipt
of any such notice, the Administrative Agent shall promptly
notify each Lender thereof. If any such notice is given, the
amount specified in such notice shall be due and payable on the
date specified therein, together with any amounts payable
pursuant to subsection 2.17 and accrued interest to such date on
the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof, and
may only be made if, after giving effect thereto, subsection 2.9
shall not have been contravened.
(b) The Borrower may at any time and from time to time
prepay Swingline Loans, in whole or in part, without premium or
penalty. Partial prepayments shall be in an aggregate principal
amount of $100,000 or a whole multiple thereof.
2.8 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Revolving
Credit Loans to ABR Revolving Credit Loans by giving irrevocable
notice to the Administrative Agent not later than 10:00 A.M.,
Charlotte, North Carolina time, on the third Business Day prior
to such proposed conversion, provided that any such conversion of
Eurodollar Loans may only be made on the last day of an Interest
Period with respect thereto. The Borrower may elect from time to
time to convert ABR Revolving Credit Loans to Eurodollar
Revolving Credit Loans by giving irrevocable notice to the
Administrative Agent not later than 10:00 A.M., Charlotte, North
Carolina time, on the third Business Day prior to such proposed
conversion. Any such notice of conversion to Eurodollar Loans
shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof.
All or any part of outstanding Eurodollar Revolving Credit Loans
and ABR Revolving Credit Loans may be converted as provided
herein, provided that (i) no ABR Loan may be converted into a
Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent has, or the Required
Lenders have, determined that such a conversion is not
appropriate and (ii) no ABR Loan may be converted into a
Eurodollar Loan after the date that is one month prior to the
Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect
thereto by the Borrower giving notice to the Administrative
Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 1.1, of the length of
the next Interest Period to be applicable to such Revolving
Credit Loans, provided that no Eurodollar Loan may be continued
as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has, or the Required
Lenders have, determined that such a continuation is not
appropriate or (ii) after the date that is one month prior to the
Termination Date and provided, further, that if the Borrower
shall fail to give any required notice as described above in this
subsection 2.8(b) or if such continuation is not permitted
pursuant to the preceding proviso such Revolving Credit Loans
shall be automatically converted to ABR Loans on the last day of
such then expiring Interest Period.
2.9 Minimum Amounts of Eurodollar Loans. All borrowings,
conversions and continuations of Revolving Credit Loans hereunder
and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of
Eurodollar Loans the then current Interest Periods with respect
to all of which begin on the same date and end on the same later
date (whether or not such Eurodollar Loans shall originally have
been made on the same date) shall be equal to a whole multiple of
$1,000,000.
2.10 Interest Rates and Payment Dates. (a) Subject to
subsection 2.10(c), each Eurodollar Loan shall bear interest for
each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such
day plus the Eurodollar Margin then in effect.
(b) Subject to subsection 2.10(c), each ABR Revolving
Credit Loan and each Swingline Loan shall bear interest at a rate
per annum equal to the ABR plus the ABR Margin then in effect.
(c) If all or a portion of (i) the principal amount of any
Revolving Credit Loan or Swingline Loan, (ii) any interest
payable thereon or (iii) any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum which is (x) in
the case of overdue principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this
subsection 2.10 as if a Level III Pricing Period were in effect,
plus 2% or (y) in the case of overdue interest, commitment fee or
other amount, the rate described in paragraph (b) of this
subsection 2.10 as if a Level III Pricing Period were in effect,
plus 2%, in each case from the date of such non-payment until
such amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to
paragraph (c) of this subsection shall be payable from time to
time on demand.
2.11 Computation of Interest and Fees. (a) Commitment fees
and interest shall be calculated on the basis of a 360-day year
(or 365 or 366 days, as the case may be, in the case of interest
on ABR Loans based on the Prime Rate) for the actual days
elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Revolving
Credit Loan or a Swingline Loan resulting from a change in the
ABR or the Eurocurrency Reserve Requirements, as applicable,
shall become effective as of the opening of business on the day
on which such change becomes effective. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders
of the effective date and the amount of each such change in
interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement
shall be conclusive and binding on the Borrower and the Lenders
in the absence of manifest error. The Administrative Agent
shall, at the request of the Borrower, deliver to the Borrower a
statement showing the quotations used by the Administrative Agent
in determining any interest rate pursuant to subsection 2.10(a).
2.12 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined
(which determination shall be conclusive and binding upon
the Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest
Period, or
(b) the Administrative Agent shall have received
notice from the Required Lenders that the Eurodollar Rate
determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or
maintaining their affected Revolving Credit Loans during
such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice
thereof to the Borrower and the Lenders as soon as practicable
thereafter. If such notice is given (x) any Eurodollar Loans
requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any Revolving Credit Loans that
were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be continued as ABR Loans and
(z) any outstanding Eurodollar Loans shall be converted, on the
first day of such Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall
the Borrower have the right to convert ABR Loans to Eurodollar
Loans.
2.13 Pro Rata Treatment and Payments. (a) Each borrowing of
Revolving Credit Loans by the Borrower from the Lenders
hereunder, each payment by the Borrower on account of any
commitment fee hereunder to the Lenders and any reduction of the
Revolving Credit Commitments of the Lenders shall be made pro
rata according to the respective Commitment Percentages of the
Lenders. Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Revolving
Credit Loans shall be made pro rata according to the respective
outstanding principal amounts of the Revolving Credit Loans then
held by the Lenders. Each payment (including each prepayment) by
the Borrower on account of principal of and interest on the
Swingline Loans shall be made to the Swingline Lender. All
payments (including prepayments) to be made by the Borrower and
the Parent (in the case of payments with respect to Letters of
Credit issued for the Parent's account) hereunder, under the
Revolving Credit Notes, under the Swingline Note and under the
Letters of Credit, whether on account of principal, interest,
fees or otherwise, shall be made without set off or counterclaim
and shall be made prior to 12:00 Noon, Charlotte, North Carolina
time, on the due date thereof to the Administrative Agent, for
the account of the Lenders or the Swingline Lender, as the case
may be, at the Administrative Agent's office specified in
subsection 11.2, in Dollars and in immediately available funds.
The Administrative Agent shall distribute such payments to the
Lenders or the Swingline Lender, as the case may be, promptly
upon receipt in like funds as received. If any payment hereunder
(other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at
the then applicable rate described in subsection 2.10(b) during
such extension. If any payment on a Eurodollar Loan becomes due
and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing of
Revolving Credit Loans that such Lender will not make the amount
that would constitute its Commitment Percentage of such borrowing
available to the Administrative Agent, the Administrative Agent
may assume that such Lender is making such amount available to
the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent,
on demand, such amount with interest thereon at a rate equal to
the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under
this subsection shall be conclusive in the absence of manifest
error. If such Lender's Commitment Percentage of such borrowing
is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the
Administrative Agent shall be entitled to recover such amount
with interest thereon calculated from such Borrowing Date at the
rate per annum described in subsection 2.10(b) then applicable to
such Revolving Credit Loans hereunder, on demand, from the
Borrower.
(c) In the event that the Revolving Credit Commitments
shall be terminated or expire at any time while Swingline Loans
are outstanding, each Lender (including the Swingline Lender)
shall make a Revolving Credit Loan (notwithstanding the
expiration or termination of the Revolving Credit Commitments) in
an amount equal to such Lender's Commitment Percentage (as of the
day of, and immediately prior to, such termination or expiration)
of such outstanding Swingline Loans. Each Lender shall, not
later than 12:00 Noon, Charlotte, North Carolina time, on the
next Business Day, make available its Commitment Percentage of
such outstanding Swingline Loans, in funds immediately available
in Charlotte, North Carolina, to the office of the Administrative
Agent, and the Administrative Agent will promptly make such funds
available to the Swingline Lender. The proceeds of such
Revolving Credit Loans shall be immediately applied to repay the
Swingline Loans outstanding on the date of termination or
expiration of the Revolving Credit Commitments. The Swingline
Lender will promptly remit to each Lender that shall have made
such funds available its Commitment Percentage of any amounts
subsequently received by the Swingline Lender in respect of such
Swingline Loans outstanding on the date of termination or
expiration of the Revolving Credit Commitments.
(d) Each Lender acknowledges and agrees that its obligation
to make a Revolving Credit Loan pursuant to subsection 2.13(c) is
absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and
continuation of an Event of Default, and that such payment (by
way of making a Revolving Credit Loan) shall be made without any
offset, abatement, withholding or reduction whatsoever.
2.14 Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof shall make it
unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as
such and convert ABR Loans to Eurodollar Loans shall forthwith be
cancelled and (b) such Lender's Revolving Credit Loans then
outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the
then current Interest Periods with respect to such Revolving
Credit Loans or within such earlier period as required by law.
If any such conversion of a Eurodollar Loan occurs on a day which
is not the last day of the then current Interest Period with
respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to subsection 2.17.
2.15 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or
application thereof or compliance by any Lender with any request
or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Revolving
Credit Note, the Swingline Note, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the
basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by subsection
2.16 and changes in the rate of tax on the overall net
income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of
funds by, any office of such Lender which is not otherwise
included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to
such Lender, by an amount which such Lender deems to be material,
of making, converting into, continuing or maintaining Eurodollar
Loans or issuing or participating in Letters of Credit or to
reduce any amount receivable hereunder in respect thereof, then,
in any such case, the Borrower or the Parent (in the case of
payments to be made with respect to Letters of Credit issued for
the account of the Parent) shall promptly pay such Lender, upon
its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable;
provided that, before making any such demand, each Lender agrees
to use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different
lending office if the making of such a designation would avoid
the need for, or reduce the amount of, such increased cost and
would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender. If any Lender becomes
entitled to claim any additional amounts pursuant to this
subsection 2.15(a), it shall promptly notify the Borrower or the
Parent, as the case may be, through the Administrative Agent, of
the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or
compliance by such Lender or any corporation controlling such
Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have
the effect of reducing the rate of return on such Lender's or
such corporation's capital as a consequence of its obligations
hereunder or under any Letter of Credit to a level below that
which such Lender or such corporation could have achieved but for
such change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then
from time to time, after submission by such Lender to the
Borrower or the Parent, as the case may be, (with a copy to the
Administrative Agent) of a written request therefor, the Borrower
or the Parent (in the case of payments to be made with respect to
Letters of Credit issued for the account of the Parent) shall pay
to such Lender such additional amount or amounts as will
compensate such Lender for such reduction.
(c) A certificate setting forth the basis for such claim in
reasonable detail as to any additional amounts payable pursuant
to this subsection 2.15 submitted by such Lender, through the
Administrative Agent, to the Borrower or the Parent, as the case
may be, shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and
the payment of the Revolving Credit Notes, the Swingline Note,
any Letters of Credit and all other amounts payable hereunder.
If any Lender claims any additional amounts payable pursuant to
this subsection 2.15, the Borrower shall have the right to cause
such Lender to be replaced (but the Agents shall not have any
obligation to identify or locate such a replacement Lender) with
an Assignee who shall become a Lender hereunder pursuant to
subsection 11.6(c). Notwithstanding the foregoing, no such
replaced Lender shall be required to sell to such Assignee its
Revolving Credit Loans at less than their par value.
2.16 Taxes. (a) All payments made by the Borrower or the
Parent, as the case may be, under this Agreement, the Revolving
Credit Notes, the Swingline Note and the Letters of Credit shall
be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, but excluding
(such exclusions being referred to as "Excluded Taxes") net
income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Administrative Agent, the Syndication
Agent, the Swingline Lender or any Lender as a result of a
present or former connection between the Administrative Agent,
the Syndication Agent, the Swingline Lender or such Lender and
the jurisdiction of the Governmental Authority imposing such tax
or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the
Administrative Agent, the Syndication Agent, the Swingline Lender
or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this
Agreement, the Revolving Credit Notes, the Swingline Note or any
Letters of Credit). If any such taxes, levies, imposts, duties,
charges, fees deductions or withholdings other than Excluded
Taxes ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Administrative Agent, the Syndication
Agent, the Swingline Lender or any Lender hereunder or under the
Revolving Credit Notes, the Swingline Note or any Letters of
Credit, the amounts so payable to the Administrative Agent, the
Syndication Agent, the Swingline Lender or such Lender shall be
increased to the extent necessary to yield to the Administrative
Agent, the Syndication Agent, the Swingline Lender or such Lender
(after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts
specified in this Agreement, the Revolving Credit Notes, the
Swingline Note and any Letters of Credit, provided, however, that
the Borrower or the Parent, as the case may be, shall not be
required to increase any such amounts payable to any Lender or
Swingline Lender that is not organized under the laws of the
United States of America or a state thereof if such Lender or
Swingline Lender fails to comply with the requirements of
paragraph (b) of this subsection. Whenever any Non-Excluded
Taxes are payable by the Borrower or the Parent, as promptly as
possible thereafter the Borrower or the Parent shall send to the
Administrative Agent for its own account or for the account of
the Syndication Agent, the Swingline Lender or such other Lender,
as the case may be, a certified copy of an original official
receipt received by the Borrower or the Parent showing payment
thereof. If the Borrower or the Parent fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority
or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrower or
the Parent shall indemnify the Administrative Agent, the
Syndication Agent, the Swingline Lender and the Lenders for any
incremental taxes, interest or penalties that may become payable
by the Administrative Agent, the Syndication Agent, the Swingline
Lender or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of
this Agreement and the payment of the Revolving Credit Notes, the
Swingline Note, any Letters of Credit and all other amounts
payable hereunder.
(b) Each Lender and Swingline Lender that is not
incorporated under the laws of the United States of America or a
state thereof shall:
(i) deliver to the Borrower and the Administrative
Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, and (B) an Internal
Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be;
(ii) deliver to the Borrower and the Administrative
Agent two further copies of any such form or certification
on or before the date that any such form or certification
expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously
delivered by it to the Borrower;
(iii) obtain such extensions of time for filing and
completing such forms or certifications as may reasonably be
requested by the Borrower or the Administrative Agent; and
(iv) certify (A) in the case of a Form 1001 or 4224,
that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States
federal income taxes and (B) in the case of a Form W-8 or W-
9, that it is entitled to an exemption from United States
backup withholding tax;
unless in any such case an event (including, without limitation,
any change in treaty, law or regulation) has occurred subsequent
to the date of this Agreement and prior to the date on which any
such delivery or certification would otherwise be required which
renders all such forms inapplicable and renders all such
certifications inaccurate or which would prevent such Lender or
Swingline Lender from duly completing and delivering any such
form or making any such certification with respect to it and such
Lender or Swingline Lender so advises the Borrower and the
Administrative Agent. If any Lender or Swingline Lender shall
provide any of the foregoing forms or make any of the foregoing
certifications and such Lender or Swingline Lender was not
entitled to provide such forms or make such certifications, the
Lender or Swingline Lender will be deemed not to have complied
with the requirements of this subsection 2.16(b). Each Person
that shall become a Lender or a Participant pursuant to
subsection 11.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and statements
required pursuant to this subsection 2.16, provided that, in the
case of a Participant, such Participant shall furnish all such
required forms and statements to the Lender from which the
related participation shall have been purchased. In no event
shall the obligations of the Borrower or the Parent under
subsection 2.16(a) be increased as a result of any participation
made by a Lender in accordance with subsection 11.6 hereof.
(c) Any Swingline Lender or Lender that otherwise would be
entitled pursuant to subsection 2.16(a) to the payment of
additional amounts with respect to a Non-Excluded Tax will (i)
use its reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to change the jurisdiction
of its lending office if the making of such a change would avoid
the need for, or reduce the amount of, any such additional
amounts which may thereafter accrue and would not, in the
reasonable judgment of such Swingline Lender or Lender, as the
case may be, be otherwise disadvantageous to such Swingline
Lender or Lender and (ii) not be entitled to payment of such
additional amounts if such Swingline Lender or Lender changes the
jurisdiction of its lending office to the extent that such a
change would increase the Non-Excluded Taxes indemnifiable by the
Parent or the Borrower hereunder.
(d) If the Borrower or the Parent shall indemnify, pursuant
to this subsection 2.16, any Administrative Agent, Syndication
Agent, Swingline Lender or Lender for a Non-Excluded Tax, the
Administrative Agent, Syndication Agent, Swingline Lender or
Lender, as the case may be, will contest, at the Borrower's sole
cost and expense, the imposition of the Non-Excluded Tax giving
rise to such indemnification provided that the Borrower shall
have provided the indemnified party with an opinion of
independent tax counsel (selected by the Borrower and reasonably
satisfactory to the indemnified party) to the effect that a
reasonable basis exists to contest the Non-Excluded Tax.
Furthermore, if the Administrative Agent, Syndication Agent,
Swingline Lender or any Lender shall receive a refund of any
Non-Excluded Tax for which the Borrower or the Parent has
provided indemnification in accordance with subsection 2.16(a)
hereof, the indemnified party shall within 30 days from the date
of such receipt, so long as no Event of Default has occurred and
is continuing, pay to the Borrower such refund (but only to the
extent of indemnity payments made, or additional amounts paid, by
the Borrower under this subsection 2.16 with respect to Non-
Excluded Taxes giving rise to such refund), net of all out-of-
pocket expenses of such indemnified party and without interest
(other than interest paid by the relevant Governmental Authority
with respect to such refund); provided, however, that the
Borrower, upon the request of such indemnified party, agrees to
repay the amount paid over to the Borrower (plus penalties,
interest or other charges) to such indemnified party in the event
such indemnified party is required to repay such refund to such
Governmental Authority.
2.17 Indemnity. The Borrower agrees to indemnify the
Swingline Lender and each Lender, as applicable, and to hold the
Swingline Lender and each Lender harmless from any loss or
expense which the Swingline Lender or such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans
after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by
the Borrower in making any prepayment after the Borrower has
given a notice thereof in accordance with the provisions of this
Agreement, (c) the making of a prepayment of Eurodollar Loans on
a day which is not the last day of an Interest Period with
respect thereto or (d) to the extent relating to losses or
expenses sustained or incurred in liquidating or employing
deposits from third parties acquired to maintain any Loan or part
thereof as a Eurodollar Loan, any assignment of Eurodollar Loans
pursuant to subsection 11.6 made by an Agent during the 180-day
period commencing on the Closing Date. Such indemnification may
include an amount equal to the excess, if any, of (i) the amount
of interest which would have accrued on the amount so prepaid or
assigned, or not so borrowed, converted or continued, for the
period from (A) the date of such prepayment or assignment or such
failure to borrow, convert or continue to (B) the last day of
such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have
commenced on the date of such failure), in each case at the
applicable rate of interest for the Swingline Loans or such
Revolving Credit Loans provided for herein (excluding, however,
the Applicable Margin included therein, if any) over (ii) the
amount of interest (as reasonably determined by the Swingline
Lender or such Lender) which would have accrued to the Swingline
Lender or such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the
interbank eurodollar market. This covenant shall survive for one
year after the termination of this Agreement and the payment of
the Revolving Credit Notes, the Swingline Note, any Letters of
Credit and all other amounts payable hereunder.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and
conditions hereof, the Issuing Lender, in reliance on the
agreements of the other Lenders set forth in subsection 3.4(a),
agrees to issue the Class G Letter of Credit and to issue
Commercial Letters of Credit and/or Standby Letters of Credit for
the account of the Borrower and for the account of the Parent
(but in no event shall the same Letter of Credit be issued for
both the account of the Parent and the Borrower) (the Class G
Letter of Credit, Commercial Letters of Credit and Standby
Letters of Credit being, collectively, "Letters of Credit") on
any Business Day during the L/C Commitment Period in such form as
may be approved from time to time by the Issuing Lender; provided
that the Issuing Lender shall have no obligation to issue (i) any
Standby Letter of Credit if, after giving effect to such
issuance, (A) the L/C Obligations would exceed the L/C Commitment
or (B) the Available Commitment of all the Lenders would be less
than zero or (ii) any Commercial Letter of Credit if, after
giving effect to such issuance, (A) the L/C Obligations would
exceed the L/C Commitment, (B) the Available Commitment of all
the Lenders would be less than zero or (C) the L/C Obligations
with respect to all Commercial Letters of Credit would exceed
$3,000,000.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (A)
the Class G Letter of Credit, (B) a standby letter of credit
issued to support obligations of the Parent or any of its
Subsidiaries, as the case may be, contingent or otherwise,
to provide credit support for workers' compensation, other
insurance programs and other corporate purposes, including
to support Existing Letters of Credit (a "Standby Letter of
Credit"), or (C) a commercial letter of credit issued in
respect of the purchase of goods or services by the Parent
or any of its Subsidiaries in the ordinary course of
business (a "Commercial Letter of Credit");
(ii) with respect to each Standby Letter of Credit,
expire no later than the earlier of (A) 365 days after its
date of issuance or (B) the Termination Date; and
(iii) with respect to each Commercial Letter of
Credit, expire no later than the earlier of (A) 360 days
after its date of issuance or (B) the Termination Date.
(c) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws
of the State of New York.
(d) The Issuing Lender shall not at any time be obligated
to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause the Issuing Lender or any L/C Participant
to exceed any limits imposed by, any applicable Requirement of
Law; provided that each Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to designate a different lending office if the
making of such a designation would permit such Lender not to
conflict with, or cause such Lender not to exceed, any limits
imposed by any Requirement of Law in connection with the issuance
of any Letter of Credit and such designation would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous
to such Lender. The Borrower may replace any Lender (but the
Agents shall not have any obligation to identify or locate a
replacement Lender) which, as a result of circumstances affecting
such Lender, causes the Issuing Lender to no longer have an
obligation to issue any such Letter of Credit with an Assignee
who shall become a Lender hereunder pursuant to subsection
11.6(c). Notwithstanding the foregoing, no such replaced Lender
shall be required to sell to such Assignee its Revolving Credit
Loans at less than their par value.
3.2 Procedure for Issuance of Letters of Credit. The
Borrower or the Parent, as the case may be, may from time to time
request that the Issuing Lender issue a Letter of Credit for its
account by delivering to the Issuing Lender at its address for
notices specified in subsection 11.2 an Application therefor,
completed to the satisfaction of the Issuing Lender, and such
other certificates, documents and other papers and information as
the Issuing Lender may request. Upon receipt of any Application,
the Issuing Lender will process such Application and the
certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing
Lender be required to issue any Letter of Credit earlier than
three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such
Letter of Credit to the beneficiary thereof or as otherwise may
be agreed by the Issuing Lender and the Borrower or the Parent,
as the case may be. The Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower or the Parent, as the case
may be, promptly following the issuance thereof.
3.3 Fees, Commissions and Other Charges. (a) The Parent or
the Borrower, as the case may be, shall pay to the Administrative
Agent, for the account of the Issuing Lender and the L/C
Participants, a nonrefundable fronting fee with respect to each
Commercial Letter of Credit issued for its account in an amount
equal to the face amount of such Letter of Credit, multiplied by
a percentage per annum (based on the number of days such Letter
of Credit is scheduled to be outstanding) equal to the sum of
1/4% plus the Eurodollar Margin in effect on the date of issuance
of such Commercial Letter of Credit. The portion of such fee
representing 1/4% per annum shall be payable to the Issuing
Lender, and the remaining portion of such fee shall be payable to
the L/C Participants to be shared ratably among them in
accordance with their respective Commitment Percentages. Such
fronting fee shall be payable in advance on the date of issuance
of each Commercial Letter of Credit.
(b) The Parent or the Borrower, as the case may be, shall
pay to the Administrative Agent, for the account of the Issuing
Lender and the L/C Participants, a nonrefundable letter of credit
commission with respect to the Class G Letter of Credit and each
Standby Letter of Credit issued for its account, computed for the
preceding calendar quarter (or shorter period commencing with the
Closing Date) in an amount equal to the average daily aggregate
amount of the Class G Letter of Credit and all Standby Letters of
Credit during such period, multiplied by a percentage per annum
(based on a 360-day year for the actual days elapsed) equal to
the sum of 1/4% plus the Eurodollar Margin in effect during such
period. The portion of such fee representing 1/4% per annum
shall be payable to the Issuing Lender, and the remaining portion
of such fee shall be payable to the L/C Participants to be shared
ratably among them in accordance with their respective Commitment
Percentages. Such commissions with respect to the Class G Letter
of Credit and Standby Letters of Credit shall be payable
quarterly in arrears on each L/C Fee Payment Date, commencing
March 31, 1996, and on the date on which the Revolving Credit
Commitments shall terminate as provided herein.
(c) In addition to the foregoing fees and commissions, the
Borrower or the Parent, as the case may be, shall pay or
reimburse the Issuing Lender for such normal and customary costs
and expenses, including, without limitation, administrative,
issuance, amendment, payment and negotiation charges, as are
incurred or charged by the Issuing Lender in issuing, effecting
payment under, amending or otherwise administering any Letter of
Credit.
(d) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the L/C
Participants all fees and commissions received by the
Administrative Agent for their respective accounts pursuant to
this subsection 3.3.
3.4 L/C Participation. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and,
to induce the Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such
L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Commitment Percentage in the
Issuing Lender's obligations and rights under each Letter of
Credit issued or continued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender
that, if a draft is paid under any Letter of Credit for which the
Issuing Lender is not reimbursed in full by the Borrower or the
Parent, as the case may be, in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender
upon demand at the Issuing Lender's address for notices specified
in subsection 11.2 an amount equal to such L/C Participant's
Commitment Percentage of the amount of such draft, or any part
thereof, which is not so reimbursed. Each L/C Participant also
agrees with the Issuing Lender that the Issuing Lender shall not
be responsible for, and the L/C Participant's participation
obligations under this subsection 3.4(a) shall not be affected
by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even though such documents shall
in fact prove to be invalid, fraudulent or forged, provided that
the foregoing shall not be construed to excuse the Issuing Lender
to the extent of any direct damages suffered by such L/C
Participant that are caused by the Issuing Lender's gross
negligence or willful misconduct in determining whether documents
presented under a Letter of Credit comply with the terms thereof.
(b) If any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to subsection 3.4(a)
in respect of any unreimbursed portion of any payment made by the
Issuing Lender under any Letter of Credit is paid to the Issuing
Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on
demand an amount equal to such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for
the period from and including the date such payment is required
to the date on which such payment is immediately available to the
Issuing Lender. If any such amount required to be paid by any
L/C Participant pursuant to subsection 3.4(a) is not in fact made
available to the Issuing Lender by such L/C Participant within
three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum described in
subsection 2.10(b) then applicable to ABR Loans hereunder. A
certificate of the Issuing Lender submitted to any L/C
Participant with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with
subsection 3.4(a), the Issuing Lender receives any payment
related to such Letter of Credit (whether directly from the
Borrower, the Parent or otherwise, including proceeds of
Collateral applied thereto by the Issuing Lender), or any payment
of interest on account thereof, the Issuing Lender will
distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned
by the Issuing Lender, such L/C Participant shall return to the
Issuing Lender the portion thereof previously distributed by the
Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower and the
Parent. (a) The Borrower or the Parent, as the case may be, each
agrees to reimburse the Issuing Lender on each date on which the
Issuing Lender notifies the Borrower or the Parent, as the case
may be, of the date and amount of a draft presented under any
Letter of Credit issued for the Borrower or the Parent's account
and paid by the Issuing Lender for the amount of (i) such draft
so paid and (ii) any taxes, fees, charges or other costs or
expenses incurred by the Issuing Lender in connection with such
payment. Each such payment shall be made to the Issuing Lender
at its address for notices specified in subsection 11.2 in
Dollars and in immediately available funds.
(b) Interest shall be payable on any and all amounts
remaining unpaid by the Borrower or the Parent, as the case may
be, under this subsection 3.5 from the date such amounts become
payable until payment in full at the rate described in subsection
2.10 which would be payable on any outstanding ABR Loans which
were then overdue.
(c) Each drawing under any Letter of Credit issued for the
account of the Borrower shall constitute a request by the
Borrower to the Administrative Agent for a borrowing pursuant to
subsection 2.3 of ABR Loans in the amount of such drawing. The
Borrowing Date with respect to such borrowing shall be the date
of such drawing.
3.6 Obligations Absolute. (a) The obligations of the
Borrower and Parent under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment which the
Borrower or the Parent, as the case may be, may have or have had
against the Issuing Lender or any beneficiary of a Letter of
Credit.
(b) Each of the Borrower and the Parent also agrees with
the Issuing Lender that the Issuing Lender shall not be
responsible for, and the Borrower's or the Parent's, as the case
may be, Reimbursement Obligations under subsection 3.5(a) shall
not be affected by, among other things, (i) the validity or
genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid,
fraudulent or forged, provided that the foregoing clause (i)
shall not be construed to excuse the Issuing Lender to the extent
of any direct damages suffered by the Borrower or the Parent, as
the case may be, that are caused by the Issuing Lender's gross
negligence or willful misconduct in determining whether documents
presented under a Letter of Credit comply with the terms thereof
or (ii) any dispute between or among the Borrower or the Parent,
as the case may be, and any beneficiary of any Letter of Credit
or any other party to which such Letter of Credit may be
transferred or (iii) any claims whatsoever of the Borrower or the
Parent, as the case may be, against any beneficiary of such
Letter of Credit or any such transferee.
(c) The Issuing Lender shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Lender's gross negligence or
willful misconduct.
(d) Each of the Borrower and the Parent agrees that any
action taken or omitted by the Issuing Lender under or in
connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified
in the Uniform Commercial Code of the State of New York, shall be
binding on the Borrower and the Parent and shall not result in
any liability of the Issuing Lender to the Borrower or the
Parent.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing
Lender shall promptly notify the Borrower or the Parent, as the
case may be, of the date and amount thereof. The responsibility
of the Issuing Lender to the Borrower or the Parent, as the case
may be, in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered
under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
3.8 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with
the provisions of this Section 3, the provisions of this Section
3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement, the Lenders to make the Revolving Credit Loans and
issue or participate in the Letters of Credit and the Swingline
Lender to make Swingline Loans, the Parent and the Borrower
hereby represent and warrant to the Agents, each Lender and the
Swingline Lender that:
4.1 Financial Condition. (a) The consolidated balance
sheet of the Parent and its consolidated Subsidiaries as at
December 31, 1994 and the related consolidated statements of
operations, of stockholders' equity and of cash flows for the
fiscal year ended on such date, reported on by Ernst & Young LLP,
copies of which have heretofore been furnished to each Lender,
are complete and correct and present fairly the consolidated
financial condition of the Parent and its consolidated
Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the fiscal
year then ended.
(b) The unaudited consolidated condensed balance sheet of
the Parent and its consolidated Subsidiaries as at September 30,
1995 and the related unaudited consolidated condensed statements
of operations and of cash flows for the nine-month period ended
on such date, certified by a Responsible Officer of the Parent,
copies of which have heretofore been furnished to each Lender,
are complete and correct and present fairly the consolidated
financial condition of the Parent and its consolidated
Subsidiaries as at such date, and the consolidated results of
their operations and cash flows then ended (to the extent
required by SEC reporting requirements for Form 10-Q and subject
to normal year-end audit adjustments).
(c) The unaudited consolidating balance sheet of the Parent
and its consolidated Subsidiaries as at September 30, 1995 and
the related consolidating statements of operations, of retained
earnings and of cash flows for the nine-month period ended on
such date, certified by a Responsible Officer of the Parent as
being fairly stated in all material respects when considered in
relation to the consolidated financial statements of the Parent
and its consolidated Subsidiaries taken as a whole, previously
furnished to each Lender, set forth separately the financial
condition as at such date and the results of operations and cash
flows for the nine-month period then ended of the Borrower and
its Subsidiaries, TDS and its Subsidiaries, the Imsamet Group,
and the Parent and its other Subsidiaries.
(d) The consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at December 31, 1994 and the related
consolidated statements of operations, of shareholder's equity
and of cash flows for the fiscal year ended on such date,
reported on by Ernst & Young LLP, previously furnished to each
Lender, are complete and correct in all material respects and
present fairly the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and cash flows for
the fiscal year then ended.
(e) Except as otherwise provided in this subsection 4.1,
all such financial statements set forth in subsections 4.1(a)
through (d) above, including any related schedules and notes
thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved
by such accountants or Responsible Officer of the Borrower or the
Parent, as the case may be, and as disclosed therein and except
with respect to the completeness of the notes with respect to any
such consolidating or interim statements). None of the Borrower,
the Parent or any of their respective consolidated Subsidiaries
had, at the date of the most recent balance sheet referred to
above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any Interest
Rate Agreement or foreign currency transaction, which is not
reflected in the foregoing statements or in the notes thereto.
During the period from September 30, 1995 to and including the
date hereof there has been no sale, transfer or other disposition
by the Parent or any of its consolidated Subsidiaries of any
material part of its business or property and no purchase or
other acquisition of any business or property (including any
Capital Stock of any other Person) material in relation to the
consolidated financial condition of the Parent and its
consolidated subsidiaries at September 30, 1995.
4.2 No Change. Since September 30, 1995 (a) there has been
no development or event which has had or could reasonably be
expected to have a Material Adverse Effect and (b) no dividends
or other distributions have been declared, paid or made upon the
Capital Stock of the Parent prior to the Closing Date nor has any
of the Capital Stock of the Parent been redeemed, retired,
purchased or otherwise acquired for value by the Parent or any of
its Subsidiaries prior to the Closing Date.
4.3 Corporate Existence; Compliance with Law. Each of the
Parent and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its organization, (b) has the corporate power and authority,
and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in
which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property
or the conduct of its business requires such qualification,
except where the failure to be so qualified and in good standing
could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect and (d) is in compliance with all
Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable
Obligations. Each of the Parent and its Subsidiaries has the
corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party
and, in the case of the Borrower, to borrow hereunder and has
taken all necessary corporate action to authorize the borrowings
on the terms and conditions of this Agreement, the Revolving
Credit Notes and the Swingline Note, and to authorize the
execution, delivery and performance of the Loan Documents to
which it is a party. Other than UCC-1 filings, no consent or
authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of
any of the Loan Documents to which the Parent or any of its
Subsidiaries is a party. This Agreement has been, and each other
Loan Document to which it is a party will be, duly executed and
delivered on behalf of each Loan Party which is a party thereto.
This Agreement constitutes, and each other Loan Document to which
each Loan Party is party when executed and delivered will
constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its
terms, except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting
creditors' rights generally, general equitable principles
(whether in equity or at law) and an implied covenant of good
faith and fair dealing.
4.5 No Legal Bar. The execution, delivery and performance
of, and (except as to Requirements of Law) exercise of remedies
under, the Loan Documents to which any Loan Party is a party, the
borrowings hereunder, the use of the proceeds thereof and the
granting of the Collateral to secure the Obligations in
accordance with the Security Documents will not violate any
Requirement of Law or Contractual Obligation of the Parent or of
any of its Subsidiaries, including the provisions of the
Indenture, and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation except as required by the Security
Documents; provided that the foregoing representation as to
conflicts between Contractual Obligations and exercise of
remedies shall not be deemed violated by any Contractual
Obligation referred to in Section 5(j) of the Borrower Pledge
Agreement or by customary restrictions contained in operating
leases and other ordinary course agreements which do not, in the
aggregate, have a material adverse effect on the exercise of
remedies.
4.6 No Material Litigation. No litigation, investigation
or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of the Parent or the
Borrower, threatened by or against the Parent or any of its
Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to any of the Loan Documents or any
of the transactions contemplated hereby or thereby or (b) which
could reasonably be expected to have a Material Adverse Effect.
To the knowledge of the Parent and the Borrower, no claim which
could reasonably be expected to have a Material Adverse Effect is
being asserted.
4.7 No Default. Neither the Parent nor any of its
Subsidiaries is in default under or with respect to any of its
Contractual Obligations involving an aggregate amount of
$3,000,000 or more unless such default could not reasonably be
expected to have a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Parent and
its Subsidiaries has good record and marketable title in fee
simple to, or a valid leasehold interest in, all its real
property, and good title to, or a valid leasehold interest in,
all its other property, and none of such property is subject to
any Lien except as permitted by subsection 7.3.
4.9 Intellectual Property. Each of the Parent and each of
its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, technology, know-how and processes
necessary for the conduct of its business as currently conducted
except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No material claim has been asserted
and is pending by any Person challenging or questioning the use
by the Parent or any of its Subsidiaries of any of the
Intellectual Property or the validity or effectiveness of any of
the Intellectual Property, and neither the Borrower nor the
Parent knows of any valid basis for any such claim. The use of
the Intellectual Property by the Parent and its Subsidiaries does
not infringe on the rights of any Person, except for such claims
and infringements that, in the aggregate, do not have or could
not reasonably be expected to have a Material Adverse Effect.
4.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Parent or any of its Subsidiaries
has or could reasonably be expected to have a Material Adverse
Effect.
4.11 Taxes. Each of the Parent and its Subsidiaries has
filed or caused to be filed all tax returns which, to the
knowledge of each of the Parent or any such Subsidiary, are
required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental
Authority (other than any taxes, fees or other charges the amount
or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the
Parent or such Subsidiary, as the case may be); no tax Lien
(other than as permitted by a subsection 7.3(a)) has been filed,
and, to the knowledge of each of the Borrower or the Parent, no
claim which could reasonably be expected to result in such a Lien
is being asserted, with respect to any such tax, fee or other
charge.
4.12 Federal Regulations. No part of the proceeds of any
Revolving Credit Loans or any Swingline Loans will be used for
"purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulations
G, U and X of the Board of Governors of the Federal Reserve
System. If requested by any Lender or the Administrative Agent,
the Borrower and the Parent will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in
said Regulation U.
4.13 ERISA. (a) Neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section
412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation
is made or deemed made with respect to any Single Employer Plan,
and each Single Employer Plan has complied in all material
respects with the applicable provisions of ERISA and the Code.
(b) No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen affecting
the assets of the Parent, the Borrower or any Commonly Controlled
Entity, during such five-year period.
(c) Based on the latest annual valuation report available
prior to the date on which the representation is made or deemed
made, the present value of all accrued benefits under each Single
Employer Plan maintained by the Parent, the Borrower or any
Commonly Controlled Entity did not exceed the value of the assets
of such Plans allocable to such accrued benefits by more than
$4,000,000 in the aggregate taking into account only those Single
Employer Plans whose accrued benefits exceed such assets.
(d) To the knowledge of the Parent, (i) neither the Parent,
the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan except
as previously satisfied or except as set forth in the Parent's
financial statements delivered pursuant to subsection 4.1(b),
(ii) neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or
Section 302 of ERISA) has occurred during the five-year period
prior to the date on which this representation is made or deemed
made with respect to any Multiemployer Plan and (iii) each
Multiemployer Plan has complied in all material respects with the
applicable provisions of ERISA and the Code.
(e) Based on the latest information provided by the
applicable Multiemployer Plan, prior to the date on which the
representation is made or deemed made, neither the Parent, the
Borrower nor any Commonly Controlled Entity would become subject
to any liability under ERISA in excess of $3,000,000 in the
aggregate if the Parent, the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all such
Multiemployer Plans.
(f) To the knowledge of the Parent, the Borrower or any
Commonly Controlled Entity, after due inquiry of the applicable
Multiemployer Plan, no such Multiemployer Plan is in
Reorganization or Insolvent.
(g) The present value (determined using actuarial and other
assumptions which are reasonable in respect of the benefits
provided and the employees participating) of the liability of the
Parent, the Borrower and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former
employees under Plans which are welfare benefit plans (as defined
in Section 3(l) of ERISA) does not, in the aggregate, exceed the
assets under all such Plans allowable to such benefits by more
than $7,000,000.
(h) All benefit plans maintained outside the United States
by the Parent, the Borrower or any Commonly Controlled Entity
comply in all material respects with their terms and the
applicable provisions of law and, based on the latest valuation
report or other information available prior to the date on which
the representation is made or deemed made, the present value of
all accrued benefits did not exceed the value of the assets of
such plans allocable to such accrued benefits.
(i) Notwithstanding the foregoing representations made in
this subsection 4.13, such representations will be deemed
breached only to the extent that any such representations, either
individually or in the aggregate, involves a liability which
could reasonably be expected to have a Material Adverse Effect.
4.14 Investment Company Act; Other Regulations. Neither the
Borrower nor the Parent is an "investment company", or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended. Neither the
Borrower nor the Parent is subject to regulation under any
federal or state statute or regulation which limits its ability
to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
constitute all of the Subsidiaries of the Parent as of the date
hereof.
4.16 Purpose of the Revolver. (a) The proceeds of the
Revolving Credit Loans and the Swingline Loans shall be used (i)
for working capital and other general corporate purposes of the
Borrower, the Parent and their Subsidiaries, (ii) for the
repayment of Indebtedness under the Existing Credit Agreement and
related fees and expenses, (iii) to fund an advance by the
Borrower to the Parent under an Intercompany Note, which advance
will be used by the Parent to repurchase and/or redeem the Class
G Preferred Stock at or below $100.00 per share, plus accrued and
unpaid dividends, and (iv) to pay fees and expenses related to
the execution and delivery of this Agreement. Upon the
repurchase and/or redemption of shares of Class G Preferred
Stock, such shares shall be immediately retired.
(b) Any proceeds of Revolving Credit Loans or Swingline
Loans which are transferred, directly or indirectly, by the
Borrower to the Parent or any of its Subsidiaries shall be
advanced to the party ultimately receiving such funds, and to any
intermediate party receiving such funds, under one or more
Intercompany Notes issued by the ultimate recipient of such funds
and by any such intermediate party.
(c) Letters of Credit will be issued solely to support
various financial and other performance obligations of the Parent
and its Subsidiaries incurred in the ordinary course of business
(including, without limitation, to support Existing Letters of
Credit).
4.17 Environmental Matters. (a) Except as set forth in that
certain Environmental Matters Memorandum previously delivered by
the Parent to each of the Lenders (the "Environmental
Memorandum"), each of the Parent and its Subsidiaries has no
liability under any, and is in compliance with all, Environmental
Laws applicable to its business, the Real Property and any
facilities and operations thereon, except where any such
liability and/or the failure to comply would not, individually or
in the aggregate, have a Material Adverse Effect.
(b) Except as set forth in the Environmental Memorandum,
each of the Parent and its Subsidiaries possess all Permits
currently required or necessary to conduct its business, except
where the failure to obtain any such Permits would not have,
individually or in the aggregate, a Material Adverse Effect (the
"Required Permits"). Except as set forth in the Environmental
Memorandum, each of the Parent and its Subsidiaries is in
compliance with all terms and conditions of the Required Permits,
including any financial assurance requirements thereof, except
where the failure to comply would not, individually or in the
aggregate, have a Material Adverse Effect. The Required Permits
are in full force and effect. To the knowledge of the Parent and
the Borrower, there are no proceedings known or threatened that,
in the reasonable belief of the Parent or the Borrower, could be
expected to result in the termination or revocation of, or any
material restrictions on, the Required Permits. There are no
facts or circumstances known to the Parent or any of its
Subsidiaries relating to any current failure, or possible future
failure, on the part of the Parent or any of its Subsidiaries to
meet the financial assurance requirements of any Required
Permits, and such Required Permits will not be impaired as a
result of the transactions contemplated hereby.
(c) Except as set forth in the Environmental Memorandum, in
the last five years prior to the date this representation is made
or deemed made, neither the Parent nor any of its Subsidiaries
has: (i) entered into or been subject to any outstanding consent
decree, compliance order, or administrative order with respect to
the Real Property or any facilities or operations thereon the
future compliance with which would, individually or in the
aggregate, have a Material Adverse Effect; or (ii) received any
notice, complaint or claim from any Governmental Authority with
respect to any Environmental Condition which, individually or in
the aggregate, has or could reasonably be expected to have a
Material Adverse Effect. With respect to each of these matters,
each of the Parent and its Subsidiaries, as applicable, has taken
all appropriate action consistent with all applicable
Environmental Laws, except where the failure to take any such
action would not, individually or in the aggregate, have a
Material Adverse Effect.
(d) Except as set forth in the Environmental Memorandum,
each of the Parent, its Subsidiaries and its Affiliates has no
knowledge of the Release, disposal, treatment, storage or
presence of any Hazardous Material, except in compliance with
applicable Environmental Law, at, in, on, under or about the Real
Property that could reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect.
(e) Except as set forth in the Environmental Memorandum,
between September 1, 1990 and the date this representation is
made or deemed made, neither the Parent nor any of its
Subsidiaries has received any notice, complaint or claim from any
Person that the Parent or any of its Subsidiaries and/or any
Current Real Property is not in compliance in all respects with
any applicable Environmental Laws, except where any such
noncompliance could not reasonably be expected to have a Material
Adverse Effect, relating to: (i) the maintenance of records of
Hazardous Materials handled at each Current Real Property;
(ii) reporting, monitoring, inspections and compliance with the
manifest system for tracking the movement of Hazardous Materials;
(iii) operating methods, techniques and practices for treating,
storing and disposing of Hazardous Materials; (iv) the location,
design and construction of the Current Real Property; (v)
contingency plans for minimizing damage from Hazardous Materials
treatment, storage or disposal activities; (vi) maintenance and
operation of each Current Real Property, including qualifications
with respect to ownership, continuity of operation, personnel
training, financial responsibility and closure; or (vii)
compliance with RCRA permit requirements, or any comparable
requirements under state or local Environmental Laws.
(f) Except as set forth in the Environmental Memorandum,
there are no proceedings pending or, to the knowledge of the
Parent or any of its Subsidiaries, threatened, in which the
status, classification or method or manner of treatment, storage,
handling or disposal or any materials or substances used in, or
produced as a waste or by-product of, the operations of the
Parent or any of its Subsidiaries, is subject to change,
modification, amendment or revocation in any manner that could
reasonably be expected to lead to a Material Adverse Effect.
4.18 Collateral. (a) Except as otherwise provided for in
subsection 6.9 with respect to Subsidiaries acquired after the
Closing Date, (i) all of the shares of Capital Stock of each of
the Parent's Subsidiaries (other than (A) the Capital Stock of
Imsamet of Arizona, (B) not more than 35% of the Capital Stock of
each Foreign Subsidiary and (C) until 60 days after the FINOVA
Financing is terminated or any refinancing thereof permitted by
the terms hereof is terminated, all the Capital Stock of IMS
Funding), (ii) all Intercompany Notes issued to the Parent or any
of its domestic Subsidiaries (other than Intercompany Notes
issued to Imsamet of Arizona, III and IMS Funding) and (iii) all
trade accounts receivable of the Parent and its domestic
Subsidiaries (other than (A) trade accounts receivable of Imsamet
of Arizona, III and IMS Funding and (B) trade accounts receivable
to the extent excluded by the Borrower Security Agreement) are
pledged to the Administrative Agent, for the ratable benefit of
the Secured Parties, pursuant to a Pledge Agreement, a Security
Agreement or a supplement thereto, as security for the
Obligations.
(b) The Administrative Agent, for the ratable benefit of
the Secured Parties, will at all times have the Liens provided
for in the Security Documents and, subject to the filing by the
Administrative Agent of continuation statements to the extent
required by the Uniform Commercial Code, the Security Documents
will at all times constitute a valid and continuing Lien of
record and first priority perfected security interest in all the
Collateral referred to therein. No filings or recordings are
required in order to perfect the security interests created under
the Security Documents, except for filings or recordings that
will either have been made or provided to the Administrative
Agent for filing on or prior to the Closing Date.
4.19 Agreements. (a) Each contract, or series of related
contracts, providing 5% or more of the total annual revenues of
the Parent and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP, (i) to which the Parent or any of
its Subsidiaries is a party as of the Closing Date or (ii) by
which it or any of its properties or assets are or may be bound
as of the Closing Date, is listed on Schedule 4.19 (such
contracts being referred to herein as the "Material Contracts").
(b) As of the Closing Date, except as set forth on Schedule
4.19, (i) each Material Contract is in all material respects
valid, binding and in full force and effect and is enforceable by
the Parent or its Subsidiary which is a party thereto in
accordance with its terms, except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting creditors' rights generally; (ii) each of
the Parent and its Subsidiaries has performed in all material
respects all obligations required to be performed by it to date
under the Material Contracts and is not (with or without the
lapse of time or the giving of notice, or both) in breach or
default in any material respect thereunder and, to the knowledge
of the Parent or the Borrower, no other party to any of the
Material Contracts is (with or without the lapse of time or the
giving of notice, or both) in breach or default in any material
respect thereunder; (iii) neither the Parent nor any of its
Subsidiaries, nor, to the knowledge of the Parent or the
Borrower, any other party to any Material Contract, has given
notice of termination of, or taken any action inconsistent with
the continuation of, any Material Contract; and (iv) none of such
other parties has any presently exercisable right to terminate
any Material Contract nor will any such other party have any
right to terminate any Material Contract on account of the
execution, delivery or performance of the Loan Documents or the
consummation of the transactions contemplated hereby.
4.20 No Material Misstatements. (a) No information,
report, financial statement, exhibit or schedule furnished by or
on behalf of the Parent or any of its Subsidiaries to any Agent,
any Lender or the Swingline Lender in connection with the
negotiation of any Loan Document or included therein or delivered
pursuant thereto contained, contains or will, at the time it is
furnished, contain any material misstatement of fact or omitted,
omits or will, at the time it is furnished, omit to state any
material fact necessary to make the statements therein, in light
of the circumstances under which they were, are or will be made,
not misleading.
(b) Copies of all material filings and other information
that the Parent has been required to file with the SEC after
December 31, 1993 and prior to the Closing Date, together in each
case with all amendments thereto filed prior to the Closing Date
(collectively, the "Filed SEC Documents"), have been delivered to
the Administrative Agent. Except as reflected in any subsequent
amendment or supplement to a Filed SEC Document, which amendment
or supplement has been filed with the SEC prior to the Closing
Date, no Filed SEC Document, including any financial statement
contained therein, at the time it was filed, contained any
misstatement of a material fact or omitted to state a material
fact necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading.
4.21 Solvency. After giving effect to the consummation of
the Refinancing, each of the Parent, the Borrower, IU
International, IMSAMET and TDS will be Solvent. "Solvent" means,
with respect to any Person, that (a) the sum of the assets of
such Person, both at a fair valuation and at present fair
saleable value, will exceed the liabilities of such Person, (b)
such Person will have sufficient capital with which to conduct
its business as presently conducted and as proposed to be
conducted and (c) such Person has not incurred debts, and does
not intend to incur debts, beyond its ability to pay such debts
as they mature. For purposes of the foregoing definition,
"debts" means any liabilities on claims, and "claim" means (i) a
right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or
unsecured, or (ii) a right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or
not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured. With respect to any contingent
liabilities, such liabilities shall be computed at the amount
which, in light of all the facts and circumstances (including any
maximum liability limitations set forth in any contingent
liabilities consisting of guarantees (other than the Guarantees))
existing at the time, represents the amount which can reasonably
be expected to become an actual or matured liability.
4.22 Transactions with Affiliates and Shareholders. Except
for (i) agreements and arrangements among the Parent and its
Wholly Owned Subsidiaries or among its Wholly Owned Subsidiaries,
(ii) Intercompany Notes issued to the Parent and its Wholly Owned
Subsidiaries, (iii) agreements and arrangements set forth on
Schedule 4.22 and (iv) agreements and arrangements permitted by
subsection 7.11, neither the Parent nor any of its Subsidiaries
is a party to, and none of the properties and assets of the
Parent or any of its Subsidiaries is subject to or bound by, any
agreement or arrangement with, any Affiliate of the Parent or any
of its Subsidiaries. Except for (i) transactions among the
Parent and its Wholly Owned Subsidiaries or among its Wholly
Owned Subsidiaries, (ii) Intercompany Notes issued to the Parent
and its Wholly Owned Subsidiaries, (iii) transactions set forth
on Schedule 4.22 and (iv) transactions permitted by
subsection 7.11, neither the Parent nor any of its Subsidiaries
is engaged in any transaction with any Affiliate of the Parent or
of any of the Subsidiaries.
4.23 Insurance. The Parent and its Subsidiaries maintain
policies of fire and casualty, liability, business interruption
and other forms of insurance in such amounts, with such
deductibles and against such risks and losses as are reasonable
for the business and assets of the Parent and its Subsidiaries.
All such policies are in full force and effect, all premiums due
and payable thereon have been paid (other than retroactive or
retrospective premium adjustments that are not yet, but may be,
required to be paid with respect to any period ending prior to
the date this representation is made or deemed made under
comprehensive general liability and workmen's compensation
insurance policies), and no notice of cancellation or termination
has been received with respect to any such policy which has not
been replaced on substantially similar terms prior to the date of
such cancellation. The activities and operations of the Parent
and its Subsidiaries have been conducted in a manner so as to
conform in all material respects to all applicable provisions of
such insurance policies.
4.24 Labor Relations. Neither the Parent nor any of its
Subsidiaries is engaged in any unfair labor practice that could,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. There is (a) no unfair labor practice
complaint pending against the Parent or any of its Subsidiaries
or, to the knowledge of the Parent or the Borrower, threatened
against any of them, before the National Labor Relations Board,
(b) no material grievance or arbitration proceeding arising out
of or under any collective bargaining agreement pending against
the Parent or any of its Subsidiaries or, to the knowledge of the
Parent or the Borrower, threatened against any of them, (c) no
strike, labor dispute, slowdown or stoppage pending against the
Parent or any of its Subsidiaries or, to the knowledge of the
Parent or the Borrower, threatened against the Parent or any of
its Subsidiaries, (d) to the knowledge of the Parent or the
Borrower, no union representation question existing with respect
to the employees of the Parent or any of its Subsidiaries and (e)
to the knowledge of the Parent or the Borrower, no union
organizing activities are taking place, except (with respect to
any matter specified in clauses (a) through (e) above) such as
could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The
agreement of each Lender to make the initial Extension of Credit
requested to be made by it is subject to the satisfaction,
immediately prior to or concurrently with the making of such
Extension of Credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall
have received (i) this Agreement, executed and delivered by
a duly authorized officer of the Borrower and of the Parent,
with a counterpart for each Lender, (ii) for the account of
each Lender, a Revolving Credit Note conforming to the
requirements hereof and executed by a duly authorized
officer of the Borrower, (iii) for the account of the
Swingline Lender, a Swingline Note conforming to the
requirements hereof and executed by a duly authorized
officer of the Borrower, (iv) each of the Pledge Agreements,
each executed and delivered by a duly authorized officer of
each party thereto, with a counterpart or a conformed copy
for each Lender, (v) each of the Guarantees, each executed
and delivered by a duly authorized officer of each party
thereto, with a counterpart or a conformed copy for each
Lender, (vi) each of the Security Agreements, each executed
and delivered by a duly authorized officer of each party
thereto, with a counterpart or a conformed copy for each
Lender and (vii) the Subordination Agreement, executed and
delivered by a duly authorized officer of each party
thereto, with a counterpart or a conformed copy for each
Lender.
(b) Related Agreements. The Administrative Agent
shall have received, with a copy for each Lender, true and
correct copies, certified as to authenticity by a
Responsible Officer of the Parent, of (i) the Indenture and
(ii) such other documents or instruments as may be
reasonably requested by the Administrative Agent, including,
without limitation, a copy of any other debt instrument,
security agreement or other material contract to which the
Borrower or the Parent or its or their Subsidiaries may be a
party.
(c) Notice of Borrowing. The Administrative Agent
shall have received a Notice of Borrowing of the Parent and
the Borrower, dated the Closing Date, substantially in the
form of Exhibit E, with appropriate insertions and
attachments, satisfactory in form and substance to the
Administrative Agent, executed by a Responsible Officer of
the Parent and the Borrower.
(d) Corporate Proceedings of the Borrower. The
Administrative Agent shall have received, with a counterpart
for each Lender, a copy of the resolutions, in form and
substance satisfactory to the Administrative Agent, of the
Board of Directors of the Borrower authorizing (i) the
execution, delivery and performance of this Agreement and
the other Loan Documents to which it is a party, (ii) the
borrowings contemplated hereunder and (iii) the granting by
it of the Liens created pursuant to the Borrower Security
Documents, certified by the Secretary or an Assistant
Secretary of the Borrower as of the Closing Date, which
certificate shall be in form and substance satisfactory to
the Administrative Agent and shall state that the
resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(e) Corporate Proceedings of the Parent. The
Administrative Agent shall have received, with a counterpart
for each Lender, a copy of the resolutions, in form and
substance satisfactory to the Administrative Agent, of the
Board of Directors of the Parent authorizing (i) the
execution, delivery and performance of this Agreement, (ii)
the execution, delivery and performance of the other Loan
Documents to which it is a party and (iii) the granting by
it of the Liens created pursuant to the Parent Security
Documents, certified by the Secretary or an Assistant
Secretary of the Parent as of the Closing Date, which
certificate shall be in form and substance satisfactory to
the Administrative Agent and shall state that the
resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(f) Corporate Proceedings of Other Loan Parties. The
Administrative Agent shall have received, with a counterpart
for each Lender, a copy of the resolutions, in form and
substance satisfactory to the Administrative Agent, of the
Board of Directors (or an authorized committee thereof) of
each Loan Party (other than the Borrower and the Parent)
authorizing (i) the execution, delivery and performance of
the Loan Documents to which it is a party and (ii) the
granting by it of the Liens created pursuant to the Security
Documents to which it is a party, certified by the Secretary
or an Assistant Secretary of such Loan Party as of the
Closing Date, which certificate shall be in form and
substance satisfactory to the Administrative Agent and shall
state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(g) Borrower Incumbency Certificate. The
Administrative Agent shall have received, with a counterpart
for each Lender, a certificate of the Borrower, dated the
Closing Date, as to the incumbency and signature of the
officers of the Borrower executing any Loan Document
satisfactory in form and substance to the Administrative
Agent, executed by the President or any Vice President and
the Secretary or any Assistant Secretary of the Borrower.
(h) Parent Incumbency Certificate. The Administrative
Agent shall have received, with a counterpart for each
Lender, a certificate of the Parent, dated the Closing Date,
as to the incumbency and signature of the officers of the
Parent executing any Loan Document satisfactory in form and
substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any
Assistant Secretary of the Parent.
(i) Other Loan Parties Incumbency Certificates. The
Administrative Agent shall have received, with a counterpart
for each Lender, a certificate of each Loan Party (other
than the Borrower and the Parent), dated the Closing Date,
as to the incumbency and signature of the officers of such
other Loan Party executing any Loan Document, satisfactory
in form and substance to the Administrative Agent, executed
by the President or any Vice President and the Secretary or
any Assistant Secretary of each such Loan Party.
(j) Corporate Documents. The Administrative Agent
shall have received, with a counterpart for each Lender,
true and complete copies of the certificate of incorporation
and by-laws of each Loan Party, certified as of the Closing
Date as complete and correct copies thereof by the Secretary
or an Assistant Secretary of each such Loan Party, and long-
form good standing certificates, dated reasonably near the
Closing Date, for each Loan Party from the Secretary of
State of such Loan Party's jurisdiction of organization and
of each jurisdiction in which such Loan Party is qualified
to do business, except where the failure to be so qualified
could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(k) Fees. The Agents shall have received the fees and
reimbursement of expenses (for which the Parent has received
invoices) provided in that certain fee letter, dated October
23, 1995, among the Parent and the Agents (the "Fee
Letter").
(l) Legal Opinions. The Administrative Agent shall
have received, with a counterpart for each Lender, the
following executed legal opinions:
(i) the executed legal opinion of special counsel
to the Borrower, the Parent and the other Loan Parties,
substantially in the form of Exhibit H-1; and
(ii) the executed legal opinion of general counsel
of each of the Borrower and the Parent, substantially
in the forms of Exhibit H-2 and Exhibit H-3,
respectively.
(m) Pledged Stock; Stock Powers; Pledged Notes. The
Administrative Agent shall have received the certificates
representing the shares pledged pursuant to each of the
Pledge Agreements, together with an undated stock power for
each such certificate executed in blank by a duly authorized
officer of the pledgor thereof, and the Intercompany Notes
pledged pursuant to the Pledge Agreements, each endorsed in
blank by a duly authorized officer of the pledgor thereof.
(n) Acknowledgement and Consent. The Administrative
Agent shall have received from each issuer referred to in
the Pledge Agreements an executed acknowledgement and
consent which in each case shall be substantially in the
form of Annex I to each Pledge Agreement.
(o) Actions to Perfect Liens. The Administrative
Agent shall have received (i) a duly completed and executed
Perfection Certificate and (ii) either (A) evidence in form
and substance satisfactory to it that all filings,
recordings, registrations and other actions, including,
without limitation, the filing of duly executed financing
statements on form UCC-1, necessary or, in the opinion of
the Administrative Agent, desirable to perfect the Liens
created by the Security Documents (other than any Lien on
Excluded Notes (as defined in the Pledge Agreements)) shall
have been completed or (B) the Administrative Agent shall
have in its possession all such documentation (including
duly executed financing statements on Form UCC-1) necessary
or, in the opinion of the Administrative Agent, desirable to
perfect the Liens created by the Security Documents (other
than any Lien on Excluded Notes).
(p) Discharge of Indebtedness under Existing Credit
Agreement. The Administrative Agent shall have received
evidence satisfactory to it that (i) all Indebtedness and
other obligations owing by the Parent and any of its
Subsidiaries under the Existing Credit Agreement and related
documents have been satisfied in full or otherwise
satisfactorily provided for, (ii) all letters of credit
(other than any Existing Letter of Credit supported by a
Letter of Credit) and other contingent obligations of such
parties in connection with the Existing Credit Agreement
shall have been terminated, (iii) all Liens securing
obligations under the Existing Credit Agreement shall have
been released, and (iv) the Existing Credit Agreement and
the Existing Security Documents shall have been terminated
and have no further force and effect other than any
provisions thereof which by their terms expressly survive
the term of the Existing Credit Agreement or any such
Existing Security Document, as the case may be.
(q) Insurance. The Administrative Agent shall have
received evidence in form and substance satisfactory to it
that all of the requirements of subsection 6.5 shall have
been satisfied.
(r) Financial Information. The Lenders shall have
received the consolidated financial statements of the Parent
and the Borrower for the fiscal years 1992, 1993 and 1994,
including balance sheets, income statements and cash flow
statements audited by independent public accountants of
recognized national standing and prepared in conformity with
GAAP (except that the Borrower's investments in Neoax
Investment Corp. and Conversion Systems, Inc. have been
recorded using the equity method of accounting instead of
being recorded on a consolidated basis), interim quarterly
financial statements for 1994 and 1995, the 1995 budget of
the Parent and the Borrower, the EnviroSource Financial
Model included in the Financial Statement Supplement to
Confidential Information Memorandum dated November, 1995,
and any material filings by the Parent with the SEC during
the last 12 months prior to the Closing Date.
(s) Consents. The Parent and its Subsidiaries shall
have received all governmental, shareholder and third party
consents and approvals necessary or, in the opinion of the
Agents, reasonably desirable in connection with the
termination of the Existing Credit Agreement and the
establishment of this Agreement.
(t) Working Capital. The Agents shall be satisfied
that the amount of committed financing available to the
Parent and its Subsidiaries, including the Borrower, shall
be sufficient to meet their ongoing seasonal financing needs
after giving effect to the Refinancing, including the
repurchase and/or redemption of the Class G Preferred Stock.
(u) Solvency. The Lenders shall have received a
solvency certificate in form and substance satisfactory to
the Lenders, or other evidence satisfactory to the Lenders,
as to the solvency, after giving effect to the Refinancing,
including the repurchase and/or redemption of the Class G
Preferred Stock, of each of the Parent, the Borrower, IU
International, IMSAMET and TDS.
(v) Environmental Review. The Lenders shall have
received a copy of the Environmental Memorandum, the
contents of which shall be satisfactory in all respects to
the Lenders.
(w) Compliance Certificate. The Lenders shall have
received a certificate, dated the Closing Date and signed by
a Responsible Officer of each of the Parent and the
Borrower, and confirming compliance with the conditions
precedent set forth in paragraphs (p), (s) and (t) of this
subsection 5.1 and in paragraphs (c), (d) and (e) of
subsection 5.2.
(x) Additional Matters. All corporate and other
proceedings, and all documents, instruments and other legal
matters in connection with the transactions contemplated by
this Agreement and the other Loan Documents shall be
satisfactory in form and substance to the Administrative
Agent, and the Administrative Agent shall have received such
other documents and legal opinions in respect of any aspect
or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
5.2 Conditions to Each Extension of Credit. The agreement
of each Lender and the Swingline Lender, as the case may be, to
make any Extension of Credit requested to be made by it on any
date (including, without limitation, its initial Extension of
Credit) is subject to the satisfaction of the following
conditions precedent:
(a) Notice. In the case of any Revolving Credit Loan
requested by the Borrower or any Letter of Credit, the
Administrative Agent shall have received a Notice of
Borrowing as required by subsection 2.3(a) or an Application
requesting the issuance of a Letter of Credit as required by
subsection 3.2, as applicable.
(b) Swingline Notice. In the case of any Swingline
Loan requested by the Borrower or any Revolving Credit Loan
requested by the Swingline Lender, the Swingline Lender
shall have received the notice from the Borrower, or the
Lenders shall have received the request from the Swingline
Lender, required by subsection 2.3(b), as applicable.
(c) Credit Limits. At the time of and immediately
after such Extension of Credit, the outstanding principal
amount of Revolving Credit Loans, Swingline Obligations and
L/C Obligations will not exceed the limitations set forth in
subsections 2.1 and 3.1(a).
(d) Representations and Warranties. Each of the
representations and warranties (including, without
limitation, the representations with respect to the absence
of material adverse change and litigation) made by the
Borrower, the Parent and the other Loan Parties in or
pursuant to the Loan Documents shall be true and correct in
all material respects on and as of such date as if made on
and as of such date except for any representation and
warranty which is expressly made as of an earlier date,
which representation and warranty shall have been true and
correct in all material respects as of such earlier date.
(e) No Default. No Default or Event of Default shall
have occurred and be continuing on such date or after giving
effect to the Revolving Credit Loans, the Swingline Loans or
Letters of Credit requested to be made or issued on such
date.
Each borrowing by the Borrower of a Revolving Credit Loan or
Swingline Loan and each request for a Letter of Credit issued on
behalf of the Borrower (or the Parent in the case of Letters of
Credit issued for its account) hereunder shall constitute a
representation and warranty by the Parent and the Borrower as of
the Borrowing Date relating to such Extension of Credit that the
conditions contained in paragraphs (c), (d) and (e) of this
subsection 5.2 have been satisfied and, to the extent applicable,
that the information supplied pursuant to paragraphs (a) and (b)
of this subsection 5.2 is true and correct.
SECTION 6. AFFIRMATIVE COVENANTS
The Parent hereby agrees that, so long as the Revolving
Credit Commitments remain in effect, the Swingline Commitment
remains in effect, any Revolving Credit Note, the Swingline Note
or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender, the Swingline Lender or any
Agent hereunder, the Parent shall and (except in the case of
delivery of financial information, reports and notices) shall
cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within the
later of 90 days after the end of each fiscal year of the
Parent or three Business Days after the date of their being
filed with the SEC, a copy of the consolidated balance sheet
of the Parent and its consolidated Subsidiaries as at the
end of such year and the related consolidated statements of
operations, of stockholders' equity and of cash flows for
such year, setting forth in each case in comparative form
the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or
qualification arising out of the scope of the audit (except
any qualification arising because the Termination Date is
within a year from the end of such fiscal year), by
independent certified public accountants of nationally
recognized standing;
(b) as soon as available, but in any event within 10
Business Days after the delivery of the financial statements
described in paragraph (a) above, a copy of the consolidated
balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of each fiscal year of the
Borrower and the related consolidated statements of
operations, of stockholder's equity and of cash flows for
such year, setting forth in each case in comparative form
the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or
qualification arising out of the scope of the audit (except
any qualification arising (i) because the Borrower's
investment in Neoax Investment Corp. is recorded using the
equity method of accounting instead of being recorded on a
consolidated basis or (ii) because the Termination Date is
within a year from the end of such fiscal year), by
independent certified public accountants of nationally
recognized standing;
(c) as soon as available, but in any event within 10
Business Days after delivery of the financial statements
described in paragraph (a) above, the corresponding
consolidating balance sheet as at the end of such year and
the related consolidating statements of operations, of
retained earnings and of cash flows for such year, all
showing separately (i) the Borrower and its Subsidiaries,
(ii) the Imsamet Group, (iii) TDS and its Subsidiaries and
(iv) any other material operating Subsidiary of the Parent,
certified by a Responsible Officer of the Parent as being
fairly stated in all material respects when considered in
relation to the consolidated financial statements of the
Parent and its consolidated Subsidiaries for such fiscal
year, taken as a whole;
(d) as soon as available, but in any event within the
later of 45 days after the end of each of the first three
quarterly periods of each fiscal year of the Parent or three
Business Days after the date of their being filed with the
SEC, the unaudited consolidated condensed balance sheet of
the Parent and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated
condensed statements of operations for such quarter and the
portion of the fiscal year through such date and of cash
flows for the portion of the fiscal year through such date,
setting forth in the statements of operations and of cash
flows in comparative form the corresponding figures for the
previous year, certified by a Responsible Officer of the
Parent (subject to normal year-end audit adjustments); and
(e) as soon as available, but in any event within 10
Business Days after delivery of the financial statements
described in paragraph (d) above, the corresponding
consolidating balance sheet as at the end of such quarter
and the related consolidating statements of operations, of
retained earnings and of cash flows for the portion of the
fiscal year through such date, all showing separately the
entities described in clauses (i) through (iv) of paragraph
(c) above, certified by a Responsible Officer of the Parent
as being fairly stated in all material respects when
considered in relation to the consolidated financial
statements of the Parent for such quarter taken as a whole.
All such financial statements are to be complete and correct in
all material respects and are to be prepared in reasonable detail
and in accordance with GAAP (except with respect to the
completeness of the notes and the classification of intercompany
items with respect to any such consolidating or interim
statements) applied consistently throughout the periods reflected
therein (except as approved by such accountants or Responsible
Officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to each
Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsections 6.1(a), a letter from
the independent certified public accountants reporting on
such financial statements stating that, except as specified
in such letter, in connection with their audit nothing came
to their attention that caused them to believe that the
Parent failed to comply with the terms, covenants,
provisions or conditions of subsections 7.1, 7.2 (except for
subsection 7.2(h)), 7.6, 7.7, 7.8, 7.9, 7.10, 7.12, 7.15,
8(a), 8(f)(i) and 8(m) of this Agreement;
(b) concurrently with the delivery of the financial
statements referred to in subsections 6.1(a), 6.1(b) and
6.1(d), a certificate of a Responsible Officer of the Parent
in substantially the form of Exhibit I (i) stating that, to
the knowledge of such officer, each of the Loan Parties
during such period has observed or performed all of its
covenants and other agreements, and satisfied every
condition, contained in this Agreement and in the Revolving
Credit Notes, the Swingline Note and the other Loan
Documents to which it is a party to be observed, performed
or satisfied by it, and that such officer has obtained no
knowledge of any Default or Event of Default except as
specified in such certificate, (ii) showing in detail the
calculations supporting such statement in respect of
subsections 7.1 and 7.8 and (iii) stating that such officer
has obtained no knowledge of any default or event of default
under the Indenture and showing in detail the calculations
supporting such statement in respect of Section 4.11 of the
Indenture;
(c) (i) not later than 30 days following the end of
each fiscal year of the Parent, a copy of the budget showing
the consolidated financial statements of the Parent and its
Subsidiaries and the consolidated operating budgets and cash
flow budgets of the Borrower and its Subsidiaries, the
Imsamet Group and TDS and its Subsidiaries for the next
succeeding fiscal year, prepared on a quarterly basis, each
such budget to be prepared consistent with past practice and
to be accompanied by a certificate of a Responsible Officer
of the Parent to the effect that such budget has been
prepared on the basis of sound financial planning practice
and that such officer has no reason to believe it is
incorrect or misleading in any material respect, and
(ii) promptly, copies of any formal longer term projections
prepared in the ordinary course of business;
(d) within five days after the same are sent, copies
of all publicly available financial statements and reports
which the Parent or any of its Subsidiaries sends to its
stockholders, and within five days after the same are filed,
copies of all financial statements and reports which the
Parent or any of its Subsidiaries may make to, or file with,
the SEC or any successor or analogous Governmental
Authority;
(e) concurrently with the delivery of the financial
statements referred to in subsections 6.1(a) and 6.1(d), a
certificate of a Responsible Officer of the Parent showing
in detail the computations necessary to determine the
Applicable Margins;
(f) promptly, such additional financial and other
information as any Lender may from time to time reasonably
request; and
(g) promptly, copies of any tax sharing arrangement
entered into by the Parent or any of its Subsidiaries.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent,
as the case may be, all its obligations of whatever nature,
except where the failure to do so could not, in the aggregate, be
reasonably expected to have a Material Adverse Effect or where
the amount or validity thereof is currently being contested in
good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of
the Parent or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now
conducted by it and preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to
maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as
otherwise permitted pursuant to subsection 7.5; and comply with
all Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith could not, in the
aggregate, be reasonably expected to have a Material Adverse
Effect.
6.5 Maintenance of Property; Insurance. Keep all property
useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted; maintain with
financially sound and reputable insurance companies insurance on
all its property in at least such amounts and against at least
such risks (but including in any event public liability, product
liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same
or a similar business; and furnish to each Lender, upon written
request, full information as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and accounts in which full, true and
correct entries in conformity with GAAP and all Requirements of
Law shall be made of all dealings and transactions in relation to
its business and activities; and permit representatives of any
Lender to visit and inspect any of its properties and examine and
make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and
other condition of the Parent and its Subsidiaries with officers
and employees of the Parent and its Subsidiaries and with its
independent certified public accountants.
6.7 Notices. Promptly give notice to the Administrative
Agent, each Lender and the Swingline Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) event of default under the Indenture, (ii)
default or event of default under any other Contractual
Obligation of the Parent or any of its Subsidiaries or (iii)
litigation, investigation or proceeding which may exist at
any time between the Parent or any of its Subsidiaries and
any Governmental Authority, which in any case referred to in
clause (ii) or (iii) could reasonably be expected to have a
Material Adverse Effect;
(c) the initiation or any material escalation of any
litigation, proceeding, claim or assessment affecting the
Parent or any of its Subsidiaries in which the aggregate
amount involved could reasonably be expected to exceed
$5,000,000 and is not covered by insurance or in which
material injunctive or similar relief is sought;
(d) the following events, as soon as possible and in
any event within 30 days after the Parent or the Borrower
knows or has reason to know thereof: (i) the occurrence or
expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a
Plan where such failure could reasonably be expected to have
a Material Adverse Effect, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC, the Parent, the
Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or
the terminating, Reorganization or Insolvency of, any Plan;
(e) any Environmental Notices;
(f) any material settlement payment made by the Parent
or any of its Subsidiaries, whether or not related to a
Plan; and
(g) any development or event which has had or could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection 6.7 shall be accompanied
by a statement of a Responsible Officer of the Parent setting
forth details of the occurrence referred to therein and stating
what action the Parent or any of its Subsidiaries, as the case
may be, proposes to take with respect thereto.
6.8 Environmental Matters. (a) Subject to the right to
contest in good faith the validity or application of any such
Environmental Laws, comply and cause all its activities on the
Current Real Property to comply with any and all Environmental
Laws except where the failure to comply could not reasonably be
expected to have a Material Adverse Effect; subject to the right
to contest in good faith or seek contribution, take prompt action
to remedy or remediate, whether or not under order or agreement
to do so, any Release of Hazardous Materials, except in
compliance with applicable Environmental Law or a Permit, at, on,
under or from any Real Property and pay immediately when due the
costs of any such compliance and remediation, unless failure to
do so in any such case shall not have or could not reasonably be
expected to have a Material Adverse Effect;
(b) handle and dispose of all Hazardous Materials in
compliance with all Environmental Laws unless failure to do so in
any such case shall not have or could not reasonably be expected
to have a Material Adverse Effect;
(c) maintain and timely seek to renew all Required Permits
in connection with the operation and maintenance of any Current
Real Property except where the failure to so maintain and timely
renew could not reasonably be expected to have a Material Adverse
Effect; and
(d) defend, indemnify and hold the Agents and the Lenders
(collectively, the "Indemnified Parties") harmless from and
against all liabilities, penalties, losses, costs, damages,
claims, causes of action and expenses, including, without
limitation (i) consequential, punitive and exemplary damages and
injunctive or similar relief, (ii) reasonable attorneys' fees and
disbursements of expert witnesses, consultants, advisers and
other Persons employed or engaged by or on behalf of the Agents,
the Lenders and the Swingline Lender in connection with any claim
or response or other matter which is the subject of this
indemnity and (iii) necessary costs and expenses incurred in
connection with any remediation, whether or not under order or
agreement, of any Release of Hazardous Materials on, under or
about the Real Property or any part thereof which the Agents, the
Lenders or the Swingline Lender may suffer or sustain by reason
of or arising from or in connection with (but excluding any
claims arising out of the gross negligence or willful misconduct
of an Indemnified Party):
(1) the imposition or recording of a Lien relating to
Environmental Laws against the Real Property or any part
thereof by any Governmental Authority;
(2) any representation or warranty in subsection 4.17
being incomplete or untrue or incorrect or misleading in any
material respect on or as of the date the same is made or
deemed made;
(3) any breach or failure of performance by the Parent
of any covenant contained in this subsection 6.8 or
subsection 7.19;
(4) claims, including, without limitation, any claim
for consequential, punitive or exemplary damages or
injunctive or similar relief, of any Person with respect to
violations or alleged violations of Environmental Laws
relating to the Current Real Property or any part thereof or
any interest therein or any operation or activity conducted
thereon;
(5) any Environmental Notice and any claims alleged or
asserted therein; and
(6) costs and expenses incurred by the Parent or any
of its Subsidiaries in connection with (A) removal of any
Lien of the kind described in clause (1) of this paragraph;
(B) any remedy or remediation, whether or not under order or
agreement, for the occurrence or presence of or exposure to
or alleged or possible or threatened occurrence or presence
of or exposure to Hazardous Materials; (C) compliance,
whether or not under order or agreement, with any
Environmental Laws; and (D) satisfaction or settlement of
any claims alleged or asserted in any Environmental Notice.
The obligations and indemnification in this paragraph shall
survive payment and performance of the Obligations and release of
any Lien in favor of the Agents, the Lenders and the Swingline
Lender, shall be without limitation of time and shall be binding
upon the Parent's and the Borrower's successors and assigns.
6.9 Acquired Subsidiaries; Further Security and Guarantees.
(a) In the event that the Parent or any of its Subsidiaries shall
either form a Subsidiary or acquire any Subsidiary from any third
party as permitted by the other provisions of this Agreement,
(i) 100% of the outstanding Capital Stock of any such new
domestic Subsidiary and 65% of the outstanding Capital Stock of
any such new Foreign Subsidiary shall be pledged, (ii) to the
extent not prohibited by any Contractual Obligation evidencing
Indebtedness of such acquired Subsidiary permitted under
subsection 7.2(h) hereof, any such new domestic Subsidiary shall
guarantee the Revolver, grant a first priority security interest
in all its accounts receivable and a first priority pledge of all
Intercompany Notes issued to it, (iii) to the extent not
prohibited by any Contractual Obligation evidencing Indebtedness
of such acquired Subsidiary permitted under subsection 7.2(h)
hereof, any such new domestic Subsidiary shall grant a first
priority pledge of 100% of the outstanding Capital Stock of any
of its domestic Subsidiaries and 65% of the outstanding Capital
Stock of any of its Foreign Subsidiaries and (iv) any such new
Subsidiary shall become a party to the Subordination Agreement.
Each such pledge and grant shall be in favor of the
Administrative Agent, for the ratable benefit of the Secured
Parties, and shall secure the Obligations. Each such pledge,
grant and guarantee shall be evidenced by an appropriate pledge
agreement, security agreement or guarantee, substantially in the
form of a Pledge Agreement, Security Agreement or Guarantee, as
the case may be (or a supplement thereto), or another form
acceptable to the Administrative Agent.
(b) Within 60 days after the termination of the FINOVA
Financing, or any refinancing thereof permitted by the terms
hereof, (i) all the Capital Stock of IMS Funding shall be
pledged, (ii) IMS Funding shall pledge all Intercompany Notes
issued to it and grant a security interest in all its accounts
receivable and (iii) IMS Funding shall guarantee the Revolver.
Each such pledge and grant shall be in favor of the
Administrative Agent, for the ratable benefit of the Secured
Parties, and shall secure the Obligations. Such pledge and grant
shall not be subject to any prior Liens. Each such pledge, grant
and guarantee shall be evidenced by an appropriate pledge
agreement, security agreement or guarantee, substantially in the
form of a Pledge Agreement, Security Agreement or Guarantee, as
the case may be (or a supplement thereto), or another form
acceptable to the Administrative Agent.
(c) Within 60 days after the earlier of (i) June 30, 1996
and (ii) the repayment of Indebtedness owing from III to West One
Bank Idaho, N.A., the Parent will cause III to guarantee the
Revolver, pledge all Intercompany Notes issued to it and grant a
security interest in its accounts receivable to the
Administrative Agent, for the ratable benefit of the Secured
Parties. Such pledge and grant shall not be subject to any prior
Liens. Such pledge, grant and guarantee shall be evidenced by an
appropriate pledge agreement, security agreement or guarantee,
substantially in the form of a Pledge Agreement, Security
Agreement or Guarantee, as the case may be (or a supplement
thereto), or another form acceptable to the Administrative Agent.
6.10 Independent Corporate Existence. (a) The Parent shall
maintain books, records and accounts that are separate from the
books, records and accounts of its Subsidiaries such that:
(i) the revenues of the Parent will be credited only to the
accounts of the Parent; (ii) all expenses incurred by the Parent
shall be paid only from the accounts of the Parent; (iii) only
officers and employees of the Parent in their capacity as such
shall have the authority to make disbursements with respect to
the accounts of the Parent; and (iv) there shall occur no sharing
of accounts or funds between the Parent, on the one hand, and any
of its Subsidiaries, on the other hand, which are not properly
accounted for on the books and records of the Parent and its
Subsidiaries.
(b) The Parent shall not make any representation to its
creditors that is inconsistent with the fact that the Parent is a
separate corporate entity and the assets of the Parent's
Subsidiaries are available first and foremost to satisfy the
claims of the creditors of such Subsidiaries.
(c) All full-time employees, consultants and agents of the
Parent shall be compensated directly from the bank accounts of
the Parent for services provided by such employees, consultants
and agents and, to the extent any employee, consultant or agent
is also an employee, consultant or agent of any of the Parent's
Subsidiaries, the compensation of such employee, consultant or
agent shall be allocated among the Parent, on the one hand, and
such Subsidiary, on the other hand, on a basis which reasonably
reflects the services rendered to the Parent.
SECTION 7. NEGATIVE COVENANTS
The Parent hereby agrees that, so long as the Revolving
Credit Commitments remain in effect, the Swingline Commitment
remains in effect, any Revolving Credit Note, the Swingline Note,
or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender, the Swingline Lender or any
Agent hereunder, the Parent shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Interest Coverage. Permit the ratio of (i) EBITDA
for the Reference Period with respect to the last day of any
fiscal quarter of the Parent referred to below to
(ii) Consolidated Interest Expense for such Reference Period
to be less than the ratio set forth below opposite such
fiscal quarter:
Fiscal Quarter Ratio
Fiscal quarters from and including fourth
quarter of fiscal 1995 through and including
third quarter of fiscal 1996 2.35:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1996 through and including
third quarter of fiscal 1997 2.45:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1997 through and including
third quarter of fiscal 1998 2.60:1.00
Fourth quarter of fiscal 1998 and all fiscal
quarters thereafter 3.00:1.00
(b) Debt to EBITDA Ratio of the Borrower. Permit the
ratio of (i) Consolidated Total Borrower Debt as of the last
day of any fiscal quarter of the Borrower referred to below
to (ii) EBITDA of the Borrower for the Reference Period with
respect to such day to be more than the ratio set forth
below opposite such fiscal quarter:
Fiscal Quarter Ratio
Fiscal quarters from and including fourth
quarter of fiscal 1995 through and including
third quarter of fiscal 1997 2.00:1.00
Fourth quarter of fiscal 1997 and all fiscal
quarters thereafter 1.75:1.00
For purposes of this subsection 7.1(b) only, EBITDA of the
Borrower shall consist of (i) operating income of the
Borrower for such period, determined in accordance with the
requirements set forth in subsection 6.1 for the audited
financial statements of the Borrower, plus (ii) depreciation
and amortization expense included in determining such
operating income, less (or plus) (iii) any aggregate net
gain (or any aggregate net loss) during such period arising
from the sale, exchange or other disposition of capital
assets (such term to include, whether tangible or
intangible, all property, plant and equipment, all inventory
sold in conjunction with dispositions of property, plant and
equipment and all securities except Cash Equivalents).
(c) Debt Service Coverage. Permit the ratio of (i)
EBITDA for the Reference Period with respect to the last day
of any fiscal quarter of the Parent referred to below, plus
any income tax refunds received by the Parent and its
Subsidiaries during such Reference Period, plus (without
duplication) IU Cash Inflows received by the Parent and its
Subsidiaries during such Reference Period, less (without
duplication) IU Cash Outflows from the Parent and its
Subsidiaries during such Reference Period, less Cash Taxes
for such Reference Period, less (without duplication)
Landfill Permit Expenditures during such Reference Period,
less Closure Trust Fund Payments during such Reference
Period to (ii) Consolidated Interest Expense for such
Reference Period, plus scheduled principal payments under
Indebtedness of the Parent and its Subsidiaries for such
Reference Period to be less than the ratio set forth below
opposite such fiscal quarter:
Fiscal Quarter Ratio
Fiscal quarters from and including fourth
quarter of fiscal 1995 through and including
third quarter of fiscal 1996 1.35:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1996 through and including
third quarter of fiscal 1997 1.80:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1997 through and including
third quarter of fiscal 1998 2.05:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1998 through and including
third quarter of fiscal 1999 2.45:1.00
Fourth quarter of fiscal 1999 and all fiscal
quarters thereafter 2.50:1.00
(d) Debt to EBITDA Ratio. Permit the ratio of (i)
Consolidated Total Debt as of the last day of any fiscal
quarter of the Parent referred to below to (ii) EBITDA for
the Reference Period with respect to such day to be more
than the ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Ratio
Fiscal quarters from and including fourth
quarter of fiscal 1995 through and including
third quarter of fiscal 1996 4.75:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1996 through and including
third quarter of fiscal 1997 4.35:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1997 through and including
third quarter of fiscal 1998 4.00:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1998 through and including
third quarter of fiscal 1999 3.75:1.00
Fourth quarter of fiscal 1999 and all fiscal
quarters thereafter 3.50:1.00
(e) Rental Expense. Permit Consolidated Rental
Expense for any fiscal year of the Parent to be greater than
$12,000,000 for fiscal 1995, $13,000,000 for fiscal 1996 and
$14,000,000 for fiscal 1997 and all fiscal years thereafter.
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness or Disqualified Capital Stock,
except:
(a) Indebtedness in respect of the Revolving Credit
Loans, the Swingline Loans, the Revolving Credit Notes, the
Swingline Note, the Letters of Credit and other obligations
of the Loan Parties under any Loan Document;
(b) Intercompany Indebtedness of Restricted Companies
owed to any other Restricted Company; provided that (i) all
such Intercompany Indebtedness is evidenced by Intercompany
Notes listed on Schedule 7.2(b) or arising hereafter which
are pledged to the Administrative Agent for the ratable
benefit of the Secured Parties, pursuant to the terms of
appropriate Pledge Agreements or supplements thereto, and
(ii) all such Intercompany Indebtedness is covered by the
Subordination Agreement;
(c) Intercompany Indebtedness of Unrestricted
Companies owed to any Restricted Company; provided that
(i) the aggregate principal amount thereof shall not exceed
$10,000,000 at any time outstanding, (ii) all such
Intercompany Indebtedness is evidenced by Intercompany Notes
listed on Schedule 7.2(b) or arising hereafter which are
pledged to the Administrative Agent for the ratable benefit
of the Secured Parties, pursuant to the terms of appropriate
Pledge Agreements or supplements thereto and (iii) all such
Intercompany Indebtedness is covered by the Subordination
Agreement;
(d) Intercompany Indebtedness of any Unrestricted
Company owed to any other Unrestricted Company and
Intercompany Indebtedness of any Restricted Company owed to
any Unrestricted Company;
(e) Indebtedness (other than as evidenced by the
Intercompany Notes) and Disqualified Capital Stock
outstanding on the Closing Date and set forth on Schedule
7.2(e);
(f) Indebtedness of Imsamet of Arizona to third
parties (other than any of its Affiliates) in an aggregate
principal amount at any time outstanding not to exceed
$3,000,000;
(g) Interest Rate Agreements having an aggregate
notional amount at any one time outstanding not to exceed
$100,000,000 entered into in connection with the management
of the Parent's consolidated exposure to interest rate risk;
(h) Indebtedness of a Person which becomes a
Subsidiary of the Parent or any of its Subsidiaries after
the date hereof; provided that (i) such Indebtedness existed
at the time such Person became a Subsidiary and was not
created in anticipation thereof, (ii) prior to such Person
becoming a Subsidiary (A) the Parent shall have furnished to
the Administrative Agent a certificate to the effect that
immediately after giving effect to the acquisition of such
Person (on a pro forma basis as if it had occurred on the
first day of the applicable Reference Period for purposes of
the financial covenants set forth herein), no Default or
Event of Default shall have occurred and be continuing and
(B) the Parent shall have prepared and furnished to the
Administrative Agent, together with the certificate referred
to in clause (A) hereof, pro forma financial statements
demonstrating to the satisfaction of the Administrative
Agent that none of the financial covenants in subsection 7.1
will be violated after giving pro forma effect to such
proposed acquisition and (iii) the aggregate principal
amount of all such Indebtedness at any time outstanding
shall not exceed $5,000,000;
(i) Indebtedness of the Parent or IU International (i)
incurred as insurance premium financing in an aggregate
amount (including any such Indebtedness set forth on
Schedule 7.2(e)) at any time outstanding not to exceed
$3,000,000 and (ii) representing reimbursement obligations
for retentions under self-insurance programs;
(j) refinancings, renewals or extensions of
Indebtedness permitted by subsection 7.2(e) or 7.2(h) in an
amount not greater than the amount required to refinance the
Indebtedness so refinanced; provided that any refinancing of
the Senior Notes shall (i) not mature or require any
amortization prior to the first anniversary of the
Termination Date, (ii) be incurred only by the Parent and be
no less structurally subordinate to the Indebtedness
evidenced hereby and by the Revolving Credit Notes and the
Swingline Note than the Senior Notes, (iii) not have a
higher interest rate than the Senior Notes, (iv) not be
subject to prepayment earlier than the Senior Notes, (v) not
be secured and (vi) not be guaranteed; and
(k) other Indebtedness in an aggregate principal
amount not to exceed $5,000,000 outstanding at any time.
7.3 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings; provided
that adequate reserves with respect thereto are maintained
on the books of the Parent or its Subsidiaries, as the case
may be, in conformity with GAAP (or, in the case of Foreign
Subsidiaries, generally accepted accounting principles in
effect from time to time in their respective jurisdictions
of incorporation);
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's, landlords', or other like Liens
arising in the ordinary course of business and not overdue
for a period of more than 60 days or which are being
contested in good faith by appropriate proceedings in a
manner which will not jeopardize or diminish the interest of
the Administrative Agent in any of the Collateral;
(c) Liens or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation and deposits securing liability to
insurance carriers under insurance or self-insurance
arrangements;
(d) Liens or deposits to secure the performance of
bids, trade contracts (other than for borrowed money),
leases (other than Capital Leases), statutory obligations,
surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course
of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances now existing or hereafter incurred in
the ordinary course of business or which are reflected on a
financing statement the Indebtedness in respect of which is
no longer outstanding which, in the aggregate, are not
substantial in amount and which do not in any case
materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of
the business of the Parent or such Subsidiary;
(f) Liens created pursuant to any of the Security
Documents;
(g) Liens in existence on the Closing Date, to the
extent set forth on Schedule 7.3(g); provided that no such
Lien is spread to cover any additional property (other than
accretions thereto) after the Closing Date;
(h) Liens on unearned premiums and loss payments on
insurance policies securing Indebtedness permitted by
subsection 7.2(i);
(i) Liens securing Indebtedness (other than
refinancings, renewals and extensions of the Senior Notes)
permitted by subsection 7.2(j) to the extent such Liens
relate solely to assets (or, in the case of "floating Liens"
on assets such as inventory and receivables, to the extent
such "floating Liens" relate to assets of the same type and
scope as those assets, if any, encumbered to secure the
Indebtedness being refinanced) which immediately prior to
such refinancing, renewal or extension were encumbered to
secure the Indebtedness being refinanced, renewed or
extended;
(j) Liens on the property or assets of a Person which
becomes a Subsidiary after the date hereof securing
Indebtedness permitted by subsection 7.2(h); provided that
(i) such Liens existed at the time such Person became a
Subsidiary and were not created in anticipation thereof,
(ii) any such Lien is not spread to cover any property or
assets of such Person after the time such Person becomes a
Subsidiary and (iii) the amount of Indebtedness secured
thereby (other than accrued interest) is not increased;
(k) Liens securing Indebtedness permitted by
subsection 7.2(f); and
(l) other Liens securing Indebtedness permitted by
subsection 7.2(k).
7.4 Limitation on Guarantee Obligations. Create, incur,
assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations of any Loan Party of
obligations under any Loan Document and any Interest Rate
Agreement permitted by subsection 7.2(g);
(b) Guarantee Obligations (including, without
limitation, the posting and guaranteeing of surety and other
like bonds) of any Restricted Company in connection with
Contractual Obligations (other than Indebtedness) incurred
in the ordinary course of business of themselves or any of
their respective direct or indirect Subsidiaries and
consistent with past practice;
(c) Guarantee Obligations of the Parent incurred in
connection with dispositions of assets of the Parent or any
of its Subsidiaries in an aggregate amount not to exceed at
any one time outstanding $2,000,000;
(d) guarantees made or issued by the Parent or any of
its Subsidiaries of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇.▇(▇), (▇), (▇), (▇) (provided that any refinancing,
renewal or extension of the Senior Notes shall not be
permitted to be guaranteed) and (k);
(e) Guarantee Obligations in existence on the date
hereof, to the extent set forth on Schedule 7.4(e); provided
that any individual Guarantee Obligation under $500,000 need
not be listed on Schedule 7.4(e) so long as the aggregate
amount of all Guarantee Obligations (other than Guarantee
Obligations otherwise permitted under this subsection 7.4)
not listed on Schedule 7.4(e) shall not exceed $3,000,000;
(f) Guarantee Obligations in existence on the date
hereof relating to Indebtedness set forth on Schedule
7.2(e); and
(g) Guarantee Obligations relating to Indebtedness and
other obligations of SALTS not to exceed $500,000
outstanding at any one time.
7.5 Limitation on Fundamental Changes. Enter into any
transaction to acquire a business or a business unit as a going
concern or merge, consolidate or amalgamate, or liquidate, wind
up or dissolve itself (or suffer any liquidation or dissolution),
or convey, sell, lease, assign, transfer or otherwise dispose of,
all or substantially all of the property, business or assets of
the Borrower, of IU International or of the Parent and its
Subsidiaries taken as a whole or convey, issue, sell, lease,
assign, transfer or otherwise dispose of any common stock of the
Borrower or of IU International, except:
(a) any Unrestricted Company may be merged or
consolidated with or into another Unrestricted Company;
provided that no domestic Unrestricted Company may merge
with and into a Foreign Subsidiary unless the domestic
corporation is the surviving entity;
(b) any Restricted Company may be merged or
consolidated with or into any other Restricted Company and
may convey, sell, lease, assign, transfer or otherwise
dispose of all or any substantial part of its property,
business or assets to any other Restricted Company (other
than the Parent); provided that (i) the Parent may not be
merged or consolidated with or into any other Person,
(ii) neither the Parent nor any of its Subsidiaries may
merge, consolidate or dispose of their respective businesses
or assets in any fashion which would cause the Senior Notes
to cease to be structurally subordinate to the Indebtedness
evidenced hereunder and under the Revolving Credit Notes and
under the Swingline Note, (iii) the Borrower may only merge
or consolidate with any Restricted Subsidiary which is a
Subsidiary of the Borrower existing on the date hereof and,
in any such merger or consolidation involving the Borrower,
the Borrower shall be the surviving entity and (iv) the
Borrower may not convey, sell, lease, assign, transfer or
otherwise dispose of all or substantially all of its
property, business or assets to any Person;
(c) any Person listed on Schedule 7.5(c) may be
liquidated, wound up or dissolved in a transaction or
transactions in which no Person other than the Restricted
Companies receives any consideration; and
(d) any acquisition of a business or business unit as
a going concern to the extent that the sum of (A) the
aggregate fair market value of consideration (including
cash, property, common stock of the Parent issued for
purposes of such acquisition and all other consideration
other than Indebtedness permitted by subsection 7.2(h)) paid
for all such acquisitions, and all acquisitions permitted
under subsection 7.9(i), after the Closing Date, and (B) the
aggregate amount of all capital contributions permitted
under subsection 7.9(i) after the Closing Date shall not
exceed $30,000,000.
7.6 Limitation on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of, any of its property,
business or assets (including, without limitation, receivables,
leasehold interests and Capital Stock of Subsidiaries and
including intercompany transfers) whether now owned or hereafter
acquired except:
(a) so long as no Event of Default shall have occurred
and be continuing, assets disposed of on the basis of an
arms-length transaction with an unrelated third party other
than as set forth in (b) through (d) below; provided that
(i) at least 80% of the consideration received shall be in
the form of cash and the Net After-Tax Cash Proceeds of such
transaction are applied as required by subsection 2.6 and
(ii) such disposition is not prohibited by subsection 7.5;
(b) the sale of inventory in the ordinary course of
business;
(c) so long as no Event of Default shall have occurred
and be continuing, the sale or discount without recourse of
accounts receivable arising in the ordinary course of
business in connection with the compromise or collection
thereof on a commercially reasonable basis; provided that
the Parent and its Subsidiaries shall not enter into any
receivables securitization or similar receivables financing;
(d) the lease of property in the ordinary course of
business consistent with past practice;
(e) as expressly permitted by subsections 7.5, 7.7,
7.9 and 7.12; provided that the Borrower shall not sell,
assign, lease, transfer or convey any of its property,
business or assets valued at more than $7,000,000 in the
aggregate to Foreign Subsidiaries;
(f) to the extent not prohibited by subsection 7.5,
any Restricted Company may from time to time convey, sell,
lease, assign, transfer or otherwise dispose of various
pieces of equipment and other tangible property, contracts,
intangibles or similar assets to any other Restricted
Company or any Unrestricted Company; provided that (i) the
Borrower determines in good faith that (A) such disposition
is necessary or appropriate to accomplish a reasonable
business objective of the Parent and its Subsidiaries and
(B) such disposition is not disadvantageous to the Lenders
in any material respect, (ii) the aggregate amount of all
such dispositions by or to the Parent pursuant to
subsections 7.6(f) and (g) shall not exceed $1,000,000 and
(iii) the aggregate amount of all such dispositions to any
Unrestricted Company shall not exceed $5,000,000;
(g) to the extent not prohibited by subsection 7.5,
any Unrestricted Company may from time to time convey, sell,
lease, assign, transfer or otherwise dispose of various
pieces of equipment and other tangible property, contracts,
intangibles or similar assets to any other Unrestricted
Company or any Restricted Company; provided that (i) the
Borrower determines in good faith that (A) such disposition
is necessary or appropriate to accomplish a reasonable
business objective of the Parent and its Subsidiaries and
(B) such disposition is not disadvantageous to the Lenders
in any material respect and (ii) the aggregate amount of all
such dispositions to the Parent pursuant to subsections
7.6(f) and (g) shall not exceed $1,000,000;
(h) Smaller Sales;
(i) payments in respect of Intercompany Indebtedness
permitted by subsections 7.2(b), (c) and (d) and by the
Pledge Agreements and the Subordination Agreement; and
(j) the transfer of the Parent's partnership interests
in Imsamet of Arizona and SALTS to IMSAMET.
7.7 Limitation on Dividends. Other than dividends or other
distributions payable solely in common stock of the Parent or, in
the case of distributions to any Subsidiary of the Parent,
Preferred Stock of the Parent, declare any dividend on, or make
any payment on account of, or set apart assets for a sinking or
other analogous fund for the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of
stock of the Parent or any of its Subsidiaries, whether now or
hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or
property or in obligations of the Parent or any Subsidiary (such
declarations, payments, settings apart, purchases, redemptions,
retirements, acquisitions and distributions being herein called
"Restricted Payments"), except that (a) IMS Funding shall be
permitted to pay dividends to the Borrower and (b) so long as no
Default or Event of Default shall have occurred and be continuing
or shall occur as a result thereof:
(i) the Parent may make Restricted Payments on or in
respect of Preferred Stock issued to one of the other
Restricted Companies;
(ii) the Parent may make Restricted Payments to redeem
or repurchase its Class G Preferred Stock at a purchase
price of up to $100.00 per share, plus accrued and unpaid
dividends;
(iii) any Subsidiary of the Parent may make
Restricted Payments in cash, Intercompany Notes or
securities (other than Capital Stock of the Borrower or IU
International) to the Parent or any wholly owned Restricted
Company;
(iv) Imsamet of Arizona may declare and make pro rata
cash distributions to unrelated third parties holding
minority equity interests to the extent permitted by its
organizational documents as in effect on the date hereof;
provided that such distribution, when considered together
with any concurrent distribution by Imsamet of Arizona to
IMSAMET or the Parent, is not disadvantageous to the Lenders
in any material respect; and
(v) the Parent may make Restricted Payments in cash on
or in respect of the Capital Stock of (A) White Motor
Corporation relating to White Motor Corporation's 1983 Plan
of Reorganization and (B) IU International and its
Subsidiaries with respect to periods prior to 1989; provided
that the aggregate amount of such payments permitted by this
clause (v) shall not exceed $500,000.
7.8 Limitation on Capital Expenditures. Make during any
fiscal year during the term of this Agreement, or commit prior to
or during such fiscal year to make during such fiscal year, any
Capital Expenditure, including any expenditure in the ordinary
course of business, which exceeds, when added to all other
Capital Expenditures made during such fiscal year or committed to
be made during such fiscal year in the aggregate for the Parent
and all its Subsidiaries, $35,000,000 in fiscal year 1995 and
$40,000,000 in any fiscal year thereafter; provided that up to
$10,000,000 not so expended in any fiscal year may be carried
over for expenditure in the next following fiscal year. It is
understood that any amount so carried over to a succeeding fiscal
year shall be deemed to be the amount expended first in such
succeeding fiscal year.
7.9 Limitation on Investments, Loans and Advances. Make or
permit to exist any advance, loan, extension of credit or capital
contribution to, or purchase any stock, bonds, notes, debentures
or other securities of, or make any other investment in, any
Person, except:
(a) extensions of trade credit in the ordinary course
of business;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of the Parent or
its Subsidiaries for relocation, travel and other expenses
in the ordinary course of business;
(d) loans to employees not in the ordinary course of
business simultaneously used to buy Capital Stock of the
Parent in an aggregate amount not to exceed $2,300,000 at
any one time outstanding;
(e) Intercompany Indebtedness permitted by subsection
7.2;
(f) equity investments in Restricted Companies in
existence on the date hereof and additional equity
investments in any Restricted Company; provided that such
additional equity investments (i) shall not exceed an
aggregate amount of $10,000,000 at any one time outstanding
and (ii) shall not be made in connection with any
acquisition of common stock, property, business or assets of
any Person (other than, to the extent permitted by all
applicable provisions hereof, any Subsidiary of the Parent);
(g) investments, loans and advances in Unrestricted
Companies and SALTS; provided that the aggregate amount (in
cash, property or other consideration) of investments, loans
and advances made after the Closing Date in: (i) IMS Funding
shall not exceed the greater of (A) $100,000 and (B) the sum
of (1) the aggregate amount of cash dividend payments or
other cash distributions paid to the Borrower by IMS Funding
and (2) the aggregate amount of cash payments made to the
Borrower by IMS Funding under that certain Operation,
Maintenance and Lease Agreement between the Borrower and IMS
Funding, dated as of March 31, 1993; (ii) Imsamet of Arizona
shall not exceed the sum of (A) $3,000,000 and (B) the
reinvestment of an aggregate amount of up to $4,000,000 of
cash dividend payments or other cash distributions paid
after the Closing Date to IMSAMET by Imsamet of Arizona;
(iii) SALTS shall not exceed the sum of (A) $1,000,000 and
(B) the reinvestment of an aggregate amount of up to
$2,000,000 of cash dividend payments or other cash
distributions paid after the Closing Date by SALTS to
IMSAMET; and (iv) other Unrestricted Companies shall not
exceed $7,000,000; provided further that all such loans and
advances pursuant to this subsection 7.9(g) shall be
evidenced by Intercompany Notes which are pledged to the
Administrative Agent for the ratable benefit of the Secured
Parties, pursuant to the terms of appropriate Pledge
Agreements or supplements thereto, and all such Intercompany
Notes shall be covered by the Subordination Agreement;
(h) deposits into trust funds, or insurance
arrangements in lieu thereof, required in order to comply
with environmental permits and made in the ordinary course
of business and (except with respect to insurance
arrangements) consistent with past practice; and
(i) any (i) acquisition of all the common stock of any
Person or (ii) contribution to the capital of any Wholly
Owned Subsidiary formed by the Parent or any of its
Subsidiaries in connection with an acquisition, in each
case, to the extent that the sum of (A) the aggregate fair
market value of consideration (including cash, property,
common stock of the Parent issued for purposes of such
acquisition and all other consideration other than
Indebtedness permitted by subsection 7.2(h)) paid for all
such acquisitions, and all acquisitions permitted under
subsection 7.5(d), after the Closing Date, and (B) the
aggregate amount of all such capital contributions after the
Closing Date shall not exceed $30,000,000.
7.10 Limitation on Payments and Modification of Debt
Instruments and Preferred Stock. (a) Make any optional or
mandatory redemption or repurchase of any Preferred Stock which
is not solely held by the Parent or any of its Wholly Owned
Subsidiaries (other than as permitted by subsection 7.7(b)(ii));
(b) amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms relating to
the payment or prepayment of principal of or interest on, the
Senior Notes or the redemption of any such Preferred Stock (other
than any such amendment, modification or change which would (i)
in the case of the Senior Notes, extend the maturity or reduce
the amount of any payment of principal or which would reduce the
rate or extend the date for payment of interest thereon or (ii)
in the case of Preferred Stock, reduce the dividends or extend
the date of repurchase or redemption thereof or permit such
repurchase or redemption with shares of common stock of the
Parent); or
(c) (i) except pursuant to any refinancing of the Senior
Notes otherwise permitted hereunder, prepay, redeem, purchase,
defease or otherwise satisfy any Senior Notes, whether or not
such action is required pursuant to the Indenture or any other
agreement, (ii) prepay, redeem, purchase or otherwise satisfy the
Indebtedness under or in connection with the Loan Agreement,
dated as of June 1, 1994, between The Industrial Development
Corporation of Owyhee County, Idaho (the "Issuer") and Envirosafe
Services of Idaho, Inc. relating to the Issuer's Industrial
Development Revenue Bonds, Series 1994 (Envirosafe Services of
Idaho, Inc. Project) in the original principal amount of
$8,500,000, or the related Guaranty Agreement made as of June 1,
1994 by the Parent in favor of the Issuer, prior to the scheduled
maturity thereof in any manner or (iii) amend, modify or change,
or consent or agree to any amendment, modification or change to,
any term or condition of any Indebtedness permitted by subsection
7.2 in any manner which, in the judgment of the Administrative
Agent, is adverse to the interests of the Lenders in any material
respect.
7.11 Limitation on Transactions with Affiliates. Except for
(a) transactions with SALTS in an aggregate amount not involving
more than $500,000 at any time outstanding, (b) transactions
consistent with past practice with any Subsidiary in existence on
the date hereof and (c) transactions with any Wholly Owned
Subsidiary, enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of property or
any arrangement relating to the rendering of any management or
other service, with any of its Affiliates unless such transaction
is not otherwise prohibited under this Agreement or the Indenture
(including Section 4.13 thereof, subject to any applicable grace
period provided for in the Indenture) and is upon terms no less
favorable to the Parent or such Subsidiary, as the case may be,
than it would obtain in a comparable arms-length transaction with
a Person not such an Affiliate; provided that, with respect to
the Borrower, any tax sharing arrangement to which the Borrower
and the Parent or any of its Affiliates (including the Parent's
Subsidiaries) is a party shall be on terms no less favorable to
the Borrower than the Borrower would obtain in a comparable arms-
length transaction with a Person not such an Affiliate.
7.12 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the
Parent or any Subsidiary of real or personal property which has
been or is to be sold or transferred by the Parent or such
Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of
such property or rental obligations of the Parent or such
Subsidiary unless (a) any such transaction is permitted under all
other applicable provisions hereof and occurs within 180 days
after the later of the date the Parent or any of its Subsidiaries
(i) acquired such real or personal property subject to any such
transaction and (ii) placed such real or personal property in
service, or (b) any Net After-Tax Cash Proceeds with respect to
any such transaction are applied in accordance with subsection
2.6.
7.13 Limitation on Changes in Fiscal Year. Permit the
fiscal year of the Parent or the Borrower to end on a day other
than December 31.
7.14 Compliance with ERISA. (a) Terminate any Plan so as to
result in any material liability to the PBGC, (b) engage in any
"prohibited transaction" (as defined in Section 4975 of the Code)
involving any Plan which would result in a material liability for
an excise tax or civil penalty in connection therewith, (c) incur
or suffer to exist any material "accumulated funding deficiency"
(as defined in Section 302 of ERISA), whether or not waived,
involving any Single Employer Plan, or (d) allow or suffer to
exist any event or condition which presents a material risk of
incurring a liability of the Parent, the Borrower or any Commonly
Controlled Entity to the PBGC that is material to the Parent and
its Subsidiaries, taken as a whole, by reason of termination of
any Plan.
7.15 Noncash Proceeds. Notwithstanding any other provision
herein to the contrary, the value of all assets and the amount of
Indebtedness represented by a debt instrument received as noncash
proceeds from Asset Dispositions after the date hereof shall not
exceed, in the case of such assets, an aggregate $5,000,000 at
any one time outstanding and, in the case of such Indebtedness,
an aggregate of $5,000,000 at any one time outstanding.
7.16 Activities of IMS Funding. So long as IMS Funding is
not a Restricted Company, permit IMS Funding to engage in any
activities other than those contemplated by the FINOVA Financing.
7.17 Activities of the Parent. Cause or permit the Parent
to engage in any material business, activity or operations other
than (a) owning or holding the Capital Stock of its Subsidiaries,
(b) managing its investments in its Subsidiaries, (c) executing
and delivering the Loan Documents, (d) lending and borrowing
Intercompany Indebtedness in accordance with all applicable
provisions hereof and of the Subordination Agreement and (e)
providing corporate overhead and other administrative functions
similar to those provided by the Parent on the Closing Date.
7.18 Restrictions Affecting Subsidiaries. Except as set
forth on Schedule 7.18, enter into or permit to exist any
agreement (other than the Loan Documents) with any Person which
prohibits or limits the ability of any of the Parent's direct or
indirect Subsidiaries to (a) pay dividends or make other
distributions or pay any Indebtedness owed to the Parent, the
Borrower or any Subsidiary, (b) make loans or advances to the
Parent, the Borrower or any Subsidiary or (c) transfer any of its
properties or assets to the Parent, the Borrower or any
Subsidiary; provided that the foregoing shall not apply to: (i)
any encumbrance or restriction with respect to a Subsidiary
pursuant to an agreement relating to any Indebtedness incurred by
such Subsidiary on or prior to the date on which such Subsidiary
becomes a Subsidiary and not in anticipation thereof and which
Indebtedness is outstanding on such date; (ii) any encumbrance or
restriction pursuant to an agreement effecting a refinancing of
Indebtedness referred to in clause (i) above or contained in any
amendment or modification with respect to such Indebtedness;
provided that the encumbrances and restrictions contained in any
such agreement, amendment or modification are no more restrictive
in any material respect with respect to the matters referred to
in clauses (a), (b) and (c) above than the encumbrances and
restrictions with respect to the Indebtedness being refinanced,
amended or modified; (iii) in the case of clause (c) above,
customary nonassignment provisions of any leases governing a
leasehold interest or of any supply, license or other agreement
entered into in the ordinary course of business of the Parent or
any Subsidiary; (iv) any encumbrance or restriction existing by
reason of any applicable Requirement of Law; or (v) restrictions
contained in security agreements securing Indebtedness of a
Subsidiary to the extent such Indebtedness and related Liens are
otherwise permitted hereunder and to the extent such restrictions
solely restrict the transfer of property subject to such security
agreements.
7.19 Environmental Condition of Property. (a) Except where
any such violation or Release of Hazardous Materials could not
reasonably be expected to have a Material Adverse Effect, use,
except in compliance with applicable Environmental Law or a
Permit, the Current Real Property or any part thereof controlled
by or under the control of the Parent or any of its Subsidiaries,
or any interest therein in any manner which would involve or
result in the occurrence or presence of or exposure to Hazardous
Materials in violation of any Environmental Law at, upon, under,
across or within the Current Real Property or any part thereof,
or would or is likely to result in the occurrence of any Release
of Hazardous Materials, except in compliance with applicable
Environmental Law or a Permit;
(b) install on, in or under the Current Real Property or
any part thereof of any underground or above-ground containers
for the storage of fuel oil, waste oils, gasoline or other
petroleum products or by-products in violation of any
Environmental Laws, except where any such violation could not
individually or in the aggregate reasonably be expected to have a
Material Adverse Effect; or
(c) transfer or permit or suffer any transfer of their
interest in the Current Real Property or any part thereof or any
interest therein or of the interest of any tenant or lessee under
any lease or of any Person entitled to operate, manage or conduct
business on the Current Real Property, unless such transfer is
made in compliance with all Environmental Laws other than where
any such noncompliance would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be
continuing:
(a) the Borrower shall fail to pay any principal of any
Revolving Credit Note or the Swingline Note when due in
accordance with the terms thereof or hereof; or the Borrower or
the Parent (with respect to Letters of Credit issued for the
Parent's account) shall fail to pay any interest on any Revolving
Credit Note or the Swingline Note, or any other amount payable
hereunder, within five Business Days after any such interest or
other amount becomes due in accordance with the terms thereof or
hereof; or
(b) any representation or warranty made or deemed made by
the Borrower, the Parent or any other Loan Party herein or in any
other Loan Document or which is contained in any certificate,
document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other
Loan Document shall be false or misleading in any material
respect on or as of the date made or deemed made; or
(c) the Parent shall default in the observance or
performance of any agreement contained in Section 7 or any Loan
Party shall default in the observance or performance of any
agreement contained in the Subordination Agreement; or
(d) the Parent or the Borrower shall default in the
observance or performance of any other agreement contained in
this Agreement (other than as provided in paragraphs (a) through
(c) of this Section 8), and such default shall continue
unremedied for a period of 30 days after the occurrence thereof;
or
(e) any Loan Party shall default in the observance or
performance of any agreement contained in any Loan Document to
which it is a party (other than this Agreement and the
Subordination Agreement), and such default shall continue
unremedied for a period of 30 days after the occurrence thereof;
or
(f) the Parent or any of its Subsidiaries shall (i) fail to
make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) of
principal of or interest (regardless of amount) on any
Indebtedness (other than the Revolving Credit Notes and the
Swingline Note), which Indebtedness is in an aggregate principal
amount in excess of $5,000,000, or in the payment (regardless of
amount) of any Guarantee Obligation (other than the Guarantees),
which Guarantee Obligation is in excess of $5,000,000, beyond the
period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness or
Guarantee Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition
relating to any such Indebtedness or Guarantee Obligation or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Guarantee Obligation (or
a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to become due prior to its stated
maturity or such Guarantee Obligation to become payable and to
remain unpaid; or
(g) (i) the Parent or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets,
or the Parent or any of its Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall
be commenced against the Parent or any of its Subsidiaries any
case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Parent or any of its
Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the
Parent or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) the Parent or any of its Subsidiaries
shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(h) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975
of the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Parent,
the Borrower or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Plan, which
Reportable Event or commencement of proceedings or appointment of
a trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Plan shall terminate for purposes of
Title IV of ERISA, (v) the Parent, the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan, (vi) any Person shall assess against the
Parent or any of its Subsidiaries, or shall serve the Parent or
any of its Subsidiaries with a notice and demand for payment of,
withdrawal liability with respect to any employee benefit plan
which is covered by ERISA and in respect of which the Parent or
any of its Subsidiaries is or was, at any time, or is deemed to
be, an "employer" as defined in Section 3(5) of ERISA or (vii)
any other event or condition shall occur or exist with respect to
a Plan or any employee benefit plan which is covered by ERISA and
in respect of which the Parent or any of its Subsidiaries is or
was, at any time, or is deemed to be, an "employer" as defined in
Section 3(5) of ERISA; and in each case in clauses (i) through
(vii) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected
to have a Material Adverse Effect (or, in the case of any event
specified in clause (ii) above with respect to any Multiemployer
Plan, there exists a material risk of incurring a liability of
the Parent, the Borrower or any Commonly Controlled Entity by
reason thereof that is material to the Parent and its
Subsidiaries, taken as a whole); or
(i) one or more judgments or decrees shall be entered
against the Parent or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of
$5,000,000 or more, and all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal
within 60 days from the entry thereof; or
(j) (i) any of the Security Documents shall cease, for any
reason, to be in full force and effect, or the Borrower, the
Parent or any other Loan Party which is a party to any of the
Security Documents shall so assert in writing or (ii) the Lien
created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be
created thereby; or
(k) any Guarantee, including, without limitation, the
Parent Guarantee contained in Section 9, shall cease, for any
reason, to be in full force and effect or any Guarantor shall so
assert in writing; or
(l) any Change of Control shall occur; or
(m) the Parent shall have failed to redeem and/or
repurchase all the outstanding Class G Preferred Stock at or
below $100.00 per share, plus accrued and unpaid dividends, by
July 15, 1996;
then, and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (g) above
with respect to any Loan Party, automatically the Revolving
Credit Commitments and the Swingline Commitment shall immediately
terminate and the Revolving Credit Loans and the Swingline Loans
hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement (including, without limitation, all
amounts of L/C Obligations owing by the Parent or the Borrower,
as the case may be, whether or not the beneficiaries of the then
outstanding relevant Letters of Credit shall have presented the
documents required thereunder) and the Revolving Credit Notes and
the Swingline Note shall immediately become due and payable, and
(B) if such event is any other Event of Default, either or both
of the following actions may be taken: (I) with the consent of
the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall,
by notice to the Borrower declare the Revolving Credit
Commitments and the Swingline Commitment to be terminated
forthwith, whereupon the Revolving Credit Commitments and the
Swingline Commitment shall immediately terminate; and (II) with
the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare
the Revolving Credit Loans and the Swingline Loans hereunder
(with accrued interest thereon) and all other amounts owing under
this Agreement (including, without limitation, all amounts of L/C
Obligations owing by the Parent or the Borrower, as the case may
be, whether or not the beneficiaries of the then outstanding
relevant Letters of Credit shall have presented the documents
required thereunder) and the Revolving Credit Notes and the
Swingline Note to be due and payable forthwith, whereupon the
same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of
acceleration pursuant to the preceding paragraph, the Borrower or
the Parent, as the case may be, shall at such time deposit in a
cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount
of such Letters of Credit issued for its account. Amounts held
in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower
or the Parent hereunder and under the Revolving Credit Notes and
the Swingline Note. After all the Letters of Credit issued
pursuant to the terms hereof shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Parent and the
Borrower hereunder and under the Revolving Credit Notes and the
Swingline Note shall have been paid in full, the balance, if any,
in such cash collateral account shall be returned to the Parent
or the Borrower, as the case may be. Each of the Parent and the
Borrower, as the case may be, shall execute and deliver to the
Administrative Agent, for the account of the Issuing Lender and
the L/C Participants, such further documents and instruments as
the Administrative Agent may request to evidence the creation and
perfection of the security interest in such cash collateral
account.
Except as expressly provided above in this Section 8,
presentment, demand, protest and all other notices of any kind
are hereby expressly waived.
SECTION 9. GUARANTEE
9.1 Guarantee of Obligations. The Parent hereby
unconditionally and irrevocably guarantees to the Agents, the
Lenders and the Swingline Lender and their respective successors,
indorsees, transferees and assigns, the prompt and complete
payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations. This Parent
Guarantee shall remain in full force and effect until the
Obligations are paid in full and the Revolving Credit Commitments
and the Swingline Commitment are terminated, notwithstanding that
from time to time prior thereto the Borrower may be free from any
Obligations. The Parent agrees that whenever, at any time, or
from time to time, it shall make any payment to any Agent, any
Lender or the Swingline Lender on account of its liability
hereunder, it will notify such Agent, such Lender or the
Swingline Lender, as applicable, in writing that such payment is
made under this Parent Guarantee for such purpose. No payment or
payments made by the Borrower, the Parent or any other Person or
received or collected by any Agent, any Lender or the Swingline
Lender from the Borrower, the Parent or any other Person by
virtue of any action or proceeding or any set-off or
appropriation or application, at any time or from time to time,
in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of
the Parent hereunder which shall remain obligated under this
Parent Guarantee, notwithstanding any such payment or payments
until the Obligations are paid in full and the Revolving Credit
Commitments and the Swingline Commitment are terminated.
9.2 No Subrogation. Notwithstanding any payment or
payments made by the Parent hereunder or any set-off or
application of funds of the Parent by the Administrative Agent,
the Syndication Agent, any Lender or any Swingline Lender, the
Parent shall not be entitled to be subrogated to any of the
rights of the Administrative Agent, the Syndication Agent or any
Lender or any Swingline Lender against the Borrower or any other
Loan Party or any collateral security or guarantee or right of
offset held by the Administrative Agent, the Syndication Agent,
any Lender or any Swingline Lender for the payment of the
Obligations, nor shall the Parent seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Loan
Party in respect of payments made by the Parent hereunder, until
all amounts owing to the Administrative Agent, the Syndication
Agent, the Swingline Lender and the Lenders by the Borrower and
the other Loan Parties on account of the Obligations are paid in
full and the Revolving Credit Commitments and the Swingline
Commitment are terminated. If any amount shall be paid to the
Parent on account of such subrogation rights at any time when all
of the Obligations shall not have been paid in full, such amount
shall be held by the Parent in trust for the Administrative
Agent, the Syndication Agent, the Swingline Lender and the
Lenders, segregated from other funds of the Parent, and shall,
forthwith upon receipt by the Parent, be turned over to the
Administrative Agent in the exact form received by the Parent
(duly indorsed by the Parent to the Administrative Agent, if
required), to be applied against the Obligations, whether matured
or unmatured, in such order as the Administrative Agent may
determine.
9.3 Amendments, etc. with respect to the Obligations;
Waiver of Rights. The Parent shall remain obligated under this
Parent Guarantee notwithstanding that, without any reservation of
rights against the Parent, and without notice to or further
assent by the Parent, any demand for payment of any of the
Obligations made by any Agent, any Lender or the Swingline Lender
may be rescinded by such Agent, such Lender or the Swingline
Lender, and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any
part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by any
Agent, any Lender or the Swingline Lender, and this Agreement,
any Revolving Credit Notes, the Swingline Note, the other Loan
Documents and any other documents executed and delivered in
connection herewith or therewith may be (with the consent of the
Loan Party thereto) amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or
the Required Lenders, as the case may be) may deem advisable from
time to time, and any collateral security, guarantee or right of
offset at any time held by any Agent, any Lender or the Swingline
Lender for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. None of the Agents, any Lender
or the Swingline Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as
security for the Obligations or for this Parent Guarantee or any
property subject thereto.
9.4 Guarantee Absolute and Unconditional. The Parent
waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of
reliance by any Agent, any Lender or the Swingline Lender upon
this Parent Guarantee or acceptance of this Parent Guarantee; the
Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon this Parent Guarantee; and
all dealings between the Borrower or the Parent, on the one hand,
and the Agents, the Lenders and the Swingline Lender, on the
other, shall likewise be conclusively presumed to have been had
or consummated in reliance upon this Parent Guarantee. The
Parent waives diligence, presentment, protest, demand for payment
and notice of default or nonpayment to or upon the Borrower or
the Parent with respect to the Obligations. This Parent
Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the
validity, regularity or enforceability of this Agreement, any
Revolving Credit Note, the Swingline Note, or any other Loan
Document, any of the Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at
any time or from time to time held by any Agent, any Lender or
the Swingline Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower against any
Agent, any Lender or the Swingline Lender or (c) any other
circumstance whatsoever (with or without notice to or knowledge
of the Borrower or the Parent) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the
Borrower for the Obligations, or of the Parent under this Parent
Guarantee, in bankruptcy or in any other instance. When pursuing
its rights and remedies hereunder against the Parent, any Agent,
any Lender and/or the Swingline Lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have
against the Borrower or any other Person or against any
collateral security or guarantee for the Obligations or any right
of offset with respect thereto, and any failure by any Agent, any
Lender or the Swingline Lender to pursue such other rights or
remedies or to collect any payments from the Borrower or any such
other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release
of the Borrower or any such other Person or of any such
collateral security, guarantee or right of offset, shall not
relieve the Parent of any liability hereunder, and shall not
impair or affect the rights and remedies, whether express,
implied or available as a matter of law, of any Agent, any Lender
or the Swingline Lender against the Parent.
9.5 Reinstatement. This Parent Guarantee shall continue to
be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by any Agent,
any Lender or the Swingline Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the
Borrower or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for,
the Borrower or any substantial part of its property, or
otherwise, all as though such payments had not been made.
9.6 Payments. The Parent hereby agrees that the
Obligations will be paid to the Administrative Agent for the
benefit of the Agents, the Lenders or the Swingline Lender, as
the case may be, without set-off or counterclaim in Dollars in
immediately available funds at the office of the Administrative
Agent referred to in subsection 11.2.
SECTION 10. THE AGENTS
10.1 Appointment. Each Lender and the Swingline Lender
hereby irrevocably designates and appoints NationsBank as the
Administrative Agent and Credit Lyonnais as the Syndication Agent
of such Lender and the Swingline Lender under this Agreement and
the other Loan Documents, and each such Lender and the Swingline
Lender irrevocably authorizes NationsBank, as the Administrative
Agent, and Credit Lyonnais, as the Syndication Agent for such
Lender and the Swingline Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent or the
Syndication Agent, as the case may be, by the terms of this
Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement,
neither Agent shall have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship
with any Lender or the Swingline Lender, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agents in such respective
capacities.
10.2 Delegation of Duties. Each Agent may execute any of
its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such
duties. Neither Agent shall be responsible for the negligence or
misconduct of any agents or attorneys-in-fact, selected by it
with reasonable care.
10.3 Exculpatory Provisions. Neither Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection
with this Agreement or any other Loan Document (except for its or
such Person's own gross negligence or willful misconduct) or (b)
responsible in any manner to any of the Lenders or the Swingline
Lender for any recitals, statements, representations or
warranties made by the Borrower, the Parent, any other Loan Party
or any of their respective officers contained in this Agreement
or any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in, or
received by any Agent under or in connection with, this Agreement
or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Revolving Credit Notes, the Swingline Note or
any other Loan Document or for any failure of the Borrower, the
Parent or any other Loan Party to perform its respective
obligations hereunder or thereunder. Neither Agent shall be
under any obligation to any Lender or the Swingline Lender to
ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower, the Parent or their
Subsidiaries.
10.4 Reliance by Agents. Each Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Revolving
Credit Note, the Swingline Note and any writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex
or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower and the Parent), independent
accountants and other experts selected by such Agent. Each Agent
may deem and treat the payee of any Revolving Credit Note or the
Swingline Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof
shall have been filed with the Administrative Agent. Each Agent
shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required
Lenders as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders and the Swingline Lender
against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
The Agents shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement, the Revolving
Credit Notes, the Swingline Note and the Letters of Credit and
the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the
Lenders and the Swingline Lender and all future holders of the
Revolving Credit Notes and the Swingline Note.
10.5 Notice of Default. Neither Agent shall be deemed to
have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Administrative Agent has
received written notice from a Lender or the Parent or the
Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives
such a notice, the Administrative Agent shall give notice thereof
to the Syndication Agent, the Lenders and the Swingline Lender.
The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed
by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to
such Default or Event of Default as it shall deem advisable in
the best interests of the Lenders and the Swingline Lender.
10.6 Non-Reliance on Agents, Other Lenders and the Swingline
Lender. Each Lender and the Swingline Lender expressly
acknowledges that neither Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and
that no act by the Agents hereinafter taken, including any review
of the affairs of the Parent and the Borrower, shall be deemed to
constitute any representation or warranty by the Agents to any
Lender or the Swingline Lender. Each of the Lenders and the
Swingline Lender represents to the Agents that it has,
independently and without reliance upon any Agent, any Lender or
the Swingline Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial
and other condition and creditworthiness of the Borrower and the
Parent and made its own decision to make its Revolving Credit
Loans and Swingline Loans, as applicable, hereunder and enter
into this Agreement. Each of the Lenders and the Swingline
Lender also represents that it will, independently and without
reliance upon any Agent, any Lender or the Swingline Lender, and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to
the business, operations, property, financial and other condition
and creditworthiness of the Borrower and the Parent. The
Syndication Agent and, except for notices, reports and other
documents expressly required to be furnished to the Lenders
and/or the Swingline Lender by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or
responsibility to provide any Agent, any Lender or the Swingline
Lender with any credit or other information concerning the
business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or the
Parent which may come into the possession of the Agents or any of
their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
10.7 Indemnification. The Lenders and the Swingline Lender
agree to indemnify the Agents in their respective capacities as
such (to the extent not reimbursed by the Borrower and the Parent
and without limiting the obligation of the Borrower and the
Parent to do so), ratably according to their respective
Commitment Percentages in effect on the date on which
indemnification is sought under this subsection (or, if
indemnification is sought after the date upon which the Revolving
Credit Commitments shall have terminated and the Revolving Credit
Loans and the Swingline Loans shall have been paid in full,
ratably in accordance with their Commitment Percentages
immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation,
at any time following the payment of the Revolving Credit Notes
and the Swingline Note) be imposed on, incurred by or asserted
against any Agent in any way relating to or arising out of this
Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken
or omitted by any Agent under or in connection with any of the
foregoing; provided that the Lenders and the Swingline Lender
shall not be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting
solely from such Agent's gross negligence or willful misconduct.
The agreements in this subsection 10.7 shall survive the payment
of the Revolving Credit Notes and the Swingline Note and all
other amounts payable hereunder.
10.8 Agents in Their Individual Capacities. The Agents and
their respective Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the
Borrower, the Parent and their Subsidiaries as though such Agents
were not the Agents hereunder and under the other Loan Documents.
With respect to any Revolving Credit Loans and Swingline Loans
made or renewed by it and any Revolving Credit Note and any
Swingline Note issued to it, any Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as
any Lender and the Swingline Lender and may exercise the same as
though it were not an Agent, and the terms "Lender", "Lenders"
and "Swingline Lender" shall include each Agent, as applicable,
in their individual capacities.
10.9 Successor Agents. Any Agent, the Issuing Lender
(except in respect of Letters of Credit issued by it) and the
Swingline Lender (except in respect of outstanding Swingline
Loans) may resign as such upon 60 days' notice to the Lenders and
the Swingline Lender. If an Agent, Issuing Lender or Swingline
Lender shall resign, then the Required Lenders shall appoint from
among the Lenders and the Swingline Lender a successor, which
successor shall be approved by the Borrower, whereupon (a) such
successor shall succeed to the rights, powers and duties of the
Agent, Issuing Lender or Swingline Lender, as the case may be,
(b) the terms "Administrative Agent", "Syndication Agent",
"Issuing Lender" and "Swingline Lender" shall mean such successor
administrative agent, syndication agent, issuing lender or
swingline lender, as the case may be, effective upon such
appointment and approval and (c) the rights, powers and duties of
the former Administrative Agent, Syndication Agent, Issuing
Lender or Swingline Lender, in its capacity as such, shall be
terminated, without any other or further act or deed on the part
of such former Administrative Agent, Syndication Agent, Issuing
Lender, or Swingline Lender as the case may be, or any of the
parties to this Agreement or any holders of the Revolving Credit
Notes and the Swingline Note. After any Agent's, Issuing
Lender's or Swingline Lender's resignation as Agent, Issuing
Lender or Swingline Lender, as the case may be, the provisions of
this subsection 10.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent, the
Issuing Lender or the Swingline Lender, as the case may be, under
this Agreement and the other Loan Documents.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement, any
Revolving Credit Note, the Swingline Note, any Letter of Credit
or any other Loan Document, nor any terms hereof or thereof may
be amended, supplemented or modified except in accordance with
the provisions of this subsection 11.1. The Required Lenders
may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with
the Borrower and the Parent (and, in the case of any Loan
Document other than this Agreement, the Loan Party which is party
thereto) written amendments, supplements or modifications hereto
and to the Revolving Credit Notes, the Swingline Note and the
other Loan Documents for the purpose of adding any provisions to
this Agreement, the Revolving Credit Notes, the Swingline Note or
the other Loan Documents or changing in any manner the rights of
the Lenders, the Swingline Lender or of the Borrower or the
Parent hereunder or thereunder or (b) waive any of the
requirements of this Agreement, the Revolving Credit Notes, the
Swingline Note or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification
shall (i) reduce the amount or extend the scheduled date of
maturity of any Revolving Credit Note or the Swingline Note or
reduce the stated rate of any interest or fee payable hereunder
or extend the scheduled date of any payment thereof or increase
the amount or extend the expiration date of any Lender's
Revolving Credit Commitment or the Swingline Lender's Swingline
Commitment or extend any scheduled Revolving Credit Commitment
reduction date, in each case without the consent of each Lender
affected thereby and the Swingline Lender if affected thereby, or
(ii) amend, modify or waive any provision of this subsection 11.1
or reduce the percentage specified in the definition of Required
Lenders, or consent to the assignment or transfer by the Borrower
or the Parent of any of its rights and obligations under this
Agreement and the other Loan Documents or release all or
substantially all of the Collateral or Guarantees, in each case
without the written consent of all the Lenders and the Swingline
Lender, or (iii) amend, modify or waive any provision of Section
10 without the written consent of the then Agents. Any such
waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and the Swingline Lender and
shall be binding upon the Borrower, the Parent, the Lenders, the
Swingline Lender, the Agents and all future holders of the
Revolving Credit Notes and the Swingline Note. In the case of
any waiver, the Borrower, the Parent, the Lenders, the Swingline
Lender and the Agents shall be restored to their former position
and rights hereunder and under the outstanding Revolving Credit
Notes, the Swingline Note and any other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured
and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any
right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when
delivered by hand, or when received, if sent by mail, postage
prepaid, or, in the case of telecopy notice, when received and
confirmed, addressed as follows in the case of the Borrower, the
Parent, the Administrative Agent, the Syndication Agent, the
Issuing Lender and the Swingline Lender, and as set forth in
Schedule 11.2 in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective
parties hereto and any future holders of the Revolving Credit
Notes or the Swingline Note:
The Borrower: International Mill Service, Inc.
c/o EnviroSource, Inc.
Five ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Parent: EnviroSource, Inc.
Five ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
NationsBank, as NationsBank, N.A.
Administrative ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Agent, Issuing ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Lender and Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Swingline Lender: Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: NationsBank Corporation
Charlotte Agency Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Location Code: NC1-001-15-04
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Lyonnais Credit Lyonnais New York Branch
New York Branch, 1301 Avenue of the Americas
as Syndication ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Agent: Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the
Administrative Agent, the Lenders or the Swingline Lender
pursuant to subsection 2.3, 2.5, 2.7, 2.8, 2.11 or 2.13 shall not
be effective until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of any Agent, any Lender
or the Swingline Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement, the Revolving Credit
Notes, the Swingline Note and the making of the Revolving Credit
Loans and the Swingline Loans hereunder.
11.5 Payment of Expenses and Taxes; Indemnity. (a) Each of
the Borrower and the Parent jointly and severally agree (i) to
pay or reimburse the Agents for all reasonable out-of-pocket
costs and reasonable expenses incurred in connection with the
development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement, the Revolving
Credit Notes, the Swingline Note and the other Loan Documents and
any other documents prepared in connection herewith or therewith,
due diligence review, the syndication of the Revolver and the
consummation and administration of the transactions contemplated
hereby and thereby, including, without limitation, the fees and
disbursements of Fennebresque, Clark, ▇▇▇▇▇▇▇▇ & Hay, counsel to
the Agents, and Cravath, Swaine & ▇▇▇▇▇, special environmental
counsel to the Agents (it being understood that the Borrower and
the Parent shall not be obligated to pay or reimburse the costs
and expenses of any other counsel in connection with the
development, preparation and execution of this Agreement and the
other Loan Documents or any amendment, supplement or modification
to this Agreement, the Revolving Credit Notes, the Swingline Note
or any other Loan Document), (ii) to pay or reimburse each
Lender, the Swingline Lender, the Administrative Agent and the
Syndication Agent for all their respective costs and expenses
incurred in connection with the enforcement or preservation of
any rights under this Agreement, the Revolving Credit Notes, the
Swingline Note, the other Loan Documents and any such other
documents, including without limitation, the fees and
disbursements of counsel to the Administrative Agent, to the
Syndication Agent, to the several Lenders and to the Swingline
Lender and (iii) to pay, indemnify, and hold each Lender, the
Swingline Lender, the Administrative Agent and the Syndication
Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other comparable taxes, if
any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or
consent under or in respect of, this Agreement, the Revolving
Credit Notes, the Swingline Note, the other Loan Documents and
any such other documents.
(b) Each of the Borrower and the Parent jointly and
severally agree to pay, indemnify, and hold each Lender, the
Swingline Lender, the Administrative Agent and the Syndication
Agent, and their respective directors, officers, employees and
Affiliates (each, an "Indemnified Party"), harmless from and
against any and all other liabilities, obligations, losses,
claims, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever
relating to or arising out of (i) the Revolver, (ii) the
execution, delivery, enforcement, performance and administration
of this Agreement, the Revolving Credit Notes, the Swingline
Note, the other Loan Documents and any other documents prepared
in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and
thereby, (iii) the use of the Letters of Credit or the proceeds
of the Loans or (iv) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any
Indemnified Party is a party thereto, and to pay all expenses
(including reasonable attorneys' fees and expenses) in connection
with the investigation of, preparation for or defense of any
pending or threatened claim or any action or proceeding arising
therefrom (all the foregoing in this paragraph (b), collectively,
the "indemnified liabilities"); provided that the Borrower and
the Parent shall have no obligation hereunder to any Indemnified
Party with respect to indemnified liabilities arising from
(i) the gross negligence or willful misconduct of such
Indemnified Party, as determined by final and nonappealable
judgment of a court of competent jurisdiction or (ii) legal
proceedings commenced against such Indemnified Party by any
security holder or creditor thereof arising out of and based upon
rights afforded any such security holder or creditor solely in
its capacity as such.
(c) The provisions of this subsection 11.5 shall remain
operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the
Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of any Agent or Lender. All
amounts due under this subsection 11.5 shall be payable on
written demand therefor.
11.6 Successors and Assigns; Participation and Assignments.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Swingline Lender, the
Agents, all future holders of the Revolving Credit Notes and the
Swingline Note and their respective successors and permitted
assigns, except that neither the Borrower nor the Parent may
assign or transfer any of their respective rights or obligations
under this Agreement without the prior written consent of each
Lender and the Swingline Lender. Any purported assignment in
violation of the foregoing shall be void.
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, at any time after providing notice thereof to the Borrower
sell to one or more banks or other entities ("Participants")
participating interests in any Revolving Credit Loan owing to
such Lender, any Revolving Credit Note held by such Lender, any
Revolving Credit Commitment of such Lender or any other interest
of such Lender hereunder and under the other Loan Documents
(provided that any such participation shall be in a minimum
amount of the lesser of (i) $5,000,000 and (ii) the entire
remaining Revolving Credit Commitment of such Lender). In the
event of any such sale by a Lender of a participating interest to
a Participant, (i) the obligations of such Lender under this
Agreement to the other parties to this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible for
the performance thereof, (iii) such Lender shall remain the
holder of any such Revolving Credit Note for all purposes under
this Agreement and the other Loan Documents, (iv) the Borrower,
the Parent and the Agents shall continue to deal solely and
directly with such Lender in connection with the rights and
obligations of such Lender under this Agreement and the other
Loan Documents and (v) such Lender shall retain the sole right to
enforce the Obligations of the Borrower and the Parent and to
approve any amendment, modification or waiver of any provision of
this Agreement (other than amendments, modifications or waivers
that reduce the amount or extend the scheduled date of maturity
of any Revolving Credit Note or the Swingline Note or reduce the
stated rate of any interest or fee payable hereunder or extend
the scheduled date of any payment thereof or increase the amount
or extend the expiration date of any Lender's Revolving Credit
Commitment or the Swingline Lender's Swingline Commitment or
extend any scheduled Revolving Credit Commitment reduction date
or release all or substantially all of the Collateral or
Guarantees). The Borrower and the Parent agree that if amounts
outstanding under this Agreement and the Revolving Credit Notes
are due or unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing
under this Agreement and any Revolving Credit Note to the same
extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement or any Revolving
Credit Note, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in
subsection 11.7(a) as fully as if it were a Lender hereunder.
The Borrower and the Parent also agree that each Participant
shall be entitled to the benefits of subsections 2.15, 2.16, 2.17
with respect to its participation in the Revolving Credit
Commitments and the Revolving Credit Loans outstanding from time
to time as if it was a Lender; provided that, in the case of
subsection 2.16, such Participant shall have complied with the
requirements of said subsection and provided, further, that no
Participant shall be entitled to receive any greater amount
pursuant to any such subsection than the transferor Lender would
have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, at any time and from time to time assign to any Lender or
any Affiliate thereof or, with the consent (which shall not be
unreasonably withheld) of the Borrower and the Agents, to an
additional bank or financial institution ("an Assignee") all or
any part of its rights and obligations under this Agreement and
the Revolving Credit Notes (provided that any such assignment
shall be in a minimum amount of the lesser of (i) $5,000,000 and
(ii) the entire remaining Revolving Credit Commitment of such
Lender) pursuant to an Assignment and Acceptance, substantially
in the form of Exhibit F, executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not
then a Lender or an Affiliate thereof, by the Borrower and the
Agents) and delivered to the Administrative Agent for its
acceptance and recording in the Register. Upon such execution,
delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Revolving
Credit Commitment as set forth therein, and (y) the assigning
Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto).
(d) The Administrative Agent shall maintain at its address
referred to in subsection 11.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the
Swingline Lender and the Revolving Credit Commitment and
Swingline Commitment of, and principal amount of the Revolving
Credit Loans and the Swingline Loans owing to, each Lender and
the Swingline Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Parent, the Agents, the Lenders and the
Swingline Lender may treat each Person whose name is recorded in
the Register as the owner of the Revolving Credit Loan and the
Swingline Loan, as applicable, recorded therein for all purposes
of this Agreement. The Register shall be available for
inspection by the Borrower, the Parent, any Lender or the
Swingline Lender at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case
of an Assignee that is not then a Lender or an affiliate thereof,
by the Borrower and the Agents) together with payment by the
Assignee or the assigning Lender to the Administrative Agent of a
registration and processing fee of $2,500, the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice
of such acceptance and recordation to the Lenders, the
Syndication Agent, the Borrower and the Parent. On or prior to
such effective date, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent (in exchange for
the Revolving Credit Note of the assigning Lender) a new
Revolving Credit Note to the order of such Assignee in an amount
equal to the Revolving Credit Commitment assumed by it pursuant
to such Assignment and Acceptance and, if the assigning Lender
has retained a Revolving Credit Commitment hereunder, a new
Revolving Credit Note to the order of the assigning Lender in an
amount equal to the Revolving Credit Commitment retained by it
hereunder. Such new Revolving Credit Notes shall be dated the
Closing Date and shall otherwise be in the form of the Revolving
Credit Note replaced thereby.
(f) Subject to subsection 11.15, each of the Borrower and
the Parent authorizes each Lender to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information in the possession of such
Lender concerning the Parent and its Affiliates which has been
delivered to such Lender by or on behalf of the Borrower and the
Parent pursuant to this Agreement or which has been delivered to
such Lender by or on behalf of the Borrower and the Parent in
connection with such Lender's credit evaluation of the Borrower
and the Parent and their Affiliates prior to becoming a party to
this Agreement.
(g) Nothing herein shall prohibit any Lender or the
Swingline Lender from pledging or assigning any Revolving Credit
Note or the Swingline Note, as applicable, to any Federal Reserve
Bank in accordance with applicable law.
11.7 Adjustments; Set-off. (a) If any Lender or the
Swingline Lender (each, a "benefitted Lender") shall at any time
receive any payment of all or part of its Revolving Credit Loans
or Swingline Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in subsection 8(g), or otherwise), in a
greater proportion than any such payment to or collateral
received by any other Lender or Swingline Lender, if any, in
respect of such other Lender's Revolving Credit Loans or
Swingline Loans, or interest thereon, such benefitted Lender
shall purchase for cash from the other Lenders and the Swingline
Lender a participating interest in such portion of each such
other Lender's or Swingline Lender's Revolving Credit Loans or
Swingline Loans, or shall provide such other Lenders and the
Swingline Lender with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such benefitted
Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders and the Swingline
Lender; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
and the Swingline Lender provided by law, each Lender and the
Swingline Lender shall have the right, without prior notice to
the Borrower or the Parent, any such notice being expressly
waived by the Borrower and the Parent, to the extent permitted by
applicable law, upon any amount becoming due and payable by the
Borrower or the Parent, as the case may be, hereunder or under
the Revolving Credit Notes or under the Swingline Note (whether
at the stated maturity, by acceleration or otherwise) to set-off
and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or the Swingline Lender or any branch or
agency thereof to or for the credit or the account of the
Borrower or the Parent, as the case may be. Each Lender and the
Swingline Lender agree promptly to notify the Borrower or the
Parent and the Administrative Agent after any such set-off and
application made by such Lender or the Swingline Lender, as
applicable, provided that the failure to give such notice shall
not affect the validity of such set-off and application.
11.8 Counterparts; Effectiveness. This Agreement may be
executed by one or more of the parties to this Agreement on any
number of separate counterparts (including by telecopy), and all
of said counterparts taken together shall be deemed to constitute
one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the
Borrower, the Parent and the Administrative Agent. This
Agreement shall become effective when it shall have been executed
by the Borrower, the Parent and the Agents and when the
Administrative Agent shall have received copies hereof which,
when taken together, bear the signatures of each Lender and the
Swingline Lender (or in the case of any Lender as to which an
executed counterpart shall not have been received, telecopy or
other such written confirmation from such Lender in form
satisfactory to the Administrative Agent of the execution of a
counterpart hereof by such Lender).
11.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
11.10 Integration. This Agreement, the other Loan
Documents and the Fee Letter represent the agreement of the
Borrower and the Parent, the Agents, the Lenders and the
Swingline Lender with respect to the subject matter hereof, and
there are no promises, undertakings, representations or
warranties by any Agent, any Lender or the Swingline Lender
relative to the subject matter hereof not expressly set forth or
referred to herein, in the other Loan Documents or in the Fee
Letter.
11.11 GOVERNING LAW. THIS AGREEMENT, THE REVOLVING
CREDIT NOTES, THE SWINGLINE NOTE AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT, THE REVOLVING CREDIT NOTES
AND THE SWINGLINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.12 Submission To Jurisdiction; Waivers. Each of the
Borrower and the Parent hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-
exclusive general jurisdiction of the Courts of the State of New
York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now
or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the
same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to the Borrower or the Parent, as the
case may be at its address set forth in subsection 11.2 or at
such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this subsection 11.12 any special,
exemplary, punitive or consequential damages.
11.13 Acknowledgements. Each of the Borrower and the
Parent hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement, the Revolving Credit
Notes, the Swingline Note and the other Loan Documents;
(b) none of the Agents, the Lenders or the Swingline Lender
has any fiduciary relationship with or duty to the Borrower or
the Parent arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship among the
Agents, Lenders and the Swingline Lender, on one hand, and the
Borrower and the Parent, on the other hand, in connection
herewith or therewith is solely that of creditor and debtor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders and the Swingline Lender or
among the Borrower, the Parent, the Lenders and the Swingline
Lender.
11.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE PARENT,
THE AGENTS, THE LENDERS AND THE SWINGLINE LENDER HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE REVOLVING
CREDIT NOTES, THE SWINGLINE NOTE OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
11.15 Confidentiality. Each Lender and the Swingline
Lender agrees to keep confidential any written or oral
information (a) provided to it by or on behalf of the Parent or
any of its Subsidiaries pursuant to or in connection with this
Agreement or (b) obtained by such Lender or the Swingline Lender
based on a review of the books and records of the Parent or any
of its Subsidiaries; provided that nothing herein shall prevent
any Lender or the Swingline Lender from disclosing any such
information (i) to any Agent, any other Lender or the Swingline
Lender, (ii) to any Transferee which receives such information
which has agreed to keep such information confidential in
accordance with the terms hereof, (iii) to its employees,
directors, agents, attorneys, accountants and other professional
advisers having been made aware of the confidential nature
thereof, (iv) upon the request or demand of any Governmental
Authority having jurisdiction over such Lender or the Swingline
Lender, (v) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant
to any Requirement of Law, (vi) which has been publicly disclosed
other than in breach of this Agreement or (vii) in connection
with the exercise of any remedy hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
INTERNATIONAL MILL SERVICE, INC.
By: /S/ ▇.▇. ▇▇▇▇▇
Title: Vice President
ENVIROSOURCE, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
NATIONSBANK, N.A., as Administrative
Agent, as Issuing Lender, as
Swingline Lender and as a Lender
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH, as
Syndication Agent and as a Lender
By: /S/ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President